• by Wendy Davis  @wendyndavis, January 24, 2023

Siding against Facebook parent Meta Platforms, the industry group Digital Content Next says advertisers should be allowed to proceed with a class-action fraud lawsuit over allegedly inflated ad metrics.

“Facebook’s potential reach metric is a fundamental metric that is material to every advertising purchase and its inflation distorts advertising markets to the detriment of advertisers and publishers,” the group writes in a friend-of-the-court brief filed late last week with the 9th Circuit Court of Appeals.

Digital Content Next adds that a class-action lawsuit by advertisers will “allow the full and transparent adjudication of these important issues.”

The group's papers come in a battle dating to August 2018, when business owner Danielle Singer alleged in a class-action complaint that Facebook induced advertisers to purchase more ads, and pay more for them, by overstating the number of users who might see the ads.

Singer later dropped out of the litigation, and DZ Reserve, which operated an e-commerce store, and Max Martialis, which sold weapons accessories, took over as lead plaintiffs.)

The complaint drew on reports by outside groups, including the 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.

Facebook urged U.S. District Court Judge James Donato in San Francisco to deny class-action status to the advertisers, arguing that they don't have enough in common with each other to warrant class-action status.

Donato sided against Facebook, ruling that the advertisers could proceed on behalf of all U.S. advertisers who used Facebook's Ad Manager or Power Editor to purchase ads on Facebook or Instagram after August 15, 2014.

Meta recently urged the 9th Circuit to reverse that decision, arguing that the class certified by Donato covers millions of differently situated advertisers, ranging from “sole proprietors to multinational corporations to governments.”

The company added that advertisers “viewed different disclosures, had different objectives, and had access to vastly different information and context for the estimates they saw.”

Meta also said the degree of alleged inflation varied, arguing that the advertisers' experts said the rate ranged from 10% to 50%, while its expert said the rate was “de minimus” for targeted campaigns.

“That variance in the statements that the class members viewed should have precluded certification,” Meta writes.

If the 9th Circuit sides with Meta and rules that class-action status isn't appropriate, the advertisers could still proceed individually, but doing so is often prohibitively expensive.

DZ Reserve and Max Martialis are expected to file papers with the 9th Circuit next month.