• by Wendy Davis , 5 hours ago

A federal judge has rejected Meta Platform's bid to force advertisers to arbitrate claims that Facebook overstated the reach of potential ad campaigns.

In a decision issued Tuesday, U.S. District Court Judge James Donato in the Northern District of California ruled that even though Meta's contract with advertisers calls for an arbitrator to decide disputes, the company waived that right by failing to assert it until the case had been pending for seven years.

"Like any other contractual right, an arbitration agreement can be waived," Donato wrote.

He elaborated that the case has been "hotly litigated in the federal courts from day one in 2018,“ and that Meta filed numerous motions during that time, but did not attempt to compel arbitration until August 2025.

"Overall, Meta waged a seven-year campaign of litigating this case in two federal courts, and took full advantage of the procedures available in the court system, while staying silent about the arbitration agreement," he wrote.

The lawsuit -- initially filed by business owner Danielle Singer -- alleged that Facebook induced advertisers to purchase more ads, and pay more for them, by overstating the potential reach of ad campaigns. The allegations drew on 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.

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. They alleged in an amended complaint that Facebook employees were aware of complaints about the potential reach metric since September 2015.

DZ Reserve, now out of business, spent around $1 million on Meta advertising campaigns and Max Martialis spent around $379 on Meta ads, according to court papers. In 2022, Donato certified a class of all U.S. advertisers who used Facebook's Ad Manager or Power Editor to purchase ads on Facebook or Instagram between August 2014 and October 2021.

Meta appealed that ruling to the 9th Circuit Court of Appeals, which sided against the company in a 2-1 ruling. Meta then unsuccessfully asked the Supreme Court to intervene.

In August of this year, Meta asked Donato to order arbitration of claims by advertisers that purchased ads between May 2018 -- when Meta added an arbitration clause in its commercial terms -- and October 2021.

Donato not only found that Meta waived that clause, but urged an appellate court to rule quickly on a potential appeal by the tech company.

"Plaintiffs have been waiting many years now for their day in court," he wrote. "If Meta files another appeal, the court requests that the circuit 'proceed with appropriate expedition.'"