SCOTUS Turns Away Meta In Battle Over Inflated Ad Metrics

The Supreme Court on Monday rejected Meta Platforms' request to hear its appeal of a decision allowing advertisers to proceed with a class-action fraud suit on behalf of an estimated three million businesses that purchased ads on Facebook and Instagram.

As is customary, the court didn't give a reason for declining to hear the case.

The move comes in a battle dating to 2018, when business owner Danielle Singer claimed in a class-action complaint that Facebook induced advertisers to purchase more ads, and pay more for them, by overstating the potential reach of ad campaigns. (Singer later dropped out of the litigation, and DZ Reserve, which operated an e-commerce store, and Max Martialis, which sold weapons accessories, became the lead plaintiffs.)

The initial complaint cited a report by the industry organization Video Advertising Bureau, which said Facebook's estimates of audience reach in every U.S. state were higher than the states' populations. The plaintiffs later amended their lawsuit by also alleging that Facebook employees were aware of complaints about the potential reach metric since September 2015.

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Among other arguments, Meta said the matter shouldn't proceed as a class-action because the platforms' advertisers were too different from each other.

Donato sided against Meta on that point and certified a class 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 appealed to the 9th Circuit Court of Appeals, which upheld Donato's order in a 2-1 decision.

The company then asked the Supreme Court to intervene, arguing that questions about how the effect of potential reach estimates on advertisers call for case-by-case determinations, making class-action treatment inappropriate.

The class certified by Donato includes “millions of diverse advertisers ranging from sole proprietors to Fortune 500 companies -- with a correspondingly wide range of advertising budgets,” Meta argued in its written petition for review, adding that the amount by which the potential reach was inflated varied by advertiser.

Meta also said many of its advertisers based decisions on factors other than the potential reach estimate -- such as whether web users clicked on ads or made purchases.

The U.S. Chamber of Commerce backed Meta's request, arguing in a friend-of-the-court brief that the 9th Circuit's ruling “will make it too easy to certify nationwide consumer-fraud classes.”

A Meta spokesperson said Monday that the Supreme Court's refusal to intervene doesn't address the claims themselves, adding: “We are confident that the evidence will demonstrate those claims are baseless.”

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