Meta Must Face Class Action Suit Over Ad Metrics

Handing Facebook parent Meta Platforms a defeat, a federal judge has granted class-action status to advertisers suing the company over allegedly inflated metrics.

The ruling, issued Tuesday by U.S. District Court Judge James Donato in the Northern District of California, allows DZ Reserve (an e-commerce store operator) and Max Martialis (which sells weapons accessories) to proceed with a lawsuit on behalf of numerous U.S. advertisers who used Facebook's Ad Manager or Power Editor to purchased ads on Facebook or Instagram after August 15, 2014.

Donato's decision stems from a dispute dating to August of 2018, when Facebook was sued for allegedly inducing advertisers to purchase more ads -- and pay higher prices for them -- by inflating the number of users the ads could reach.

The initial complaint drew on reports by outside groups, including the industry organization Video Advertising Bureau, which said in 2017 that Facebook's estimates of audience reach in every U.S. state were higher than the states' populations.

The advertisers claimed in an amended complaint filed in 2020 that Facebook employees were aware of complaints about the potential reach metric since September of 2015.

Facebook previously said in court papers that estimates about campaigns' reach are not guarantees, and do not affect billing.

Facebook argued that the case shouldn't proceed as a class action for several reasons, including that advertisers on the platform don't have enough in common with each other.

Donato rejected that argument.

“Plaintiffs have adduced evidence indicating that, regardless of size or buying power, Meta’s customers saw similar representations by Meta about its advertising reach and programs,” Donato wrote.

He added that an expert witness for the plaintiffs said that all advertisers were shown potential reach estimates inflated by a similar percentage.

Donato scheduled a conference in the matter for May 26, but hasn't yet set a trial date.

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