A federal appellate court has granted Meta
Platforms' petition to review a ruling requiring the company to face claims by Facebook users who say they were duped by fraudulent ads.
The move by the 9th Circuit Court of
Appeals comes in a dispute that began in 2021, when consumers including Oregon resident Christopher Calise alleged in a class-action complaint that they lost money after responding to phony ads on
Facebook.
Calise specifically alleged that he was bilked out of around $49 after attempting to purchase a car-engine assembly kit advertised on the platform.
The
plaintiffs contend that Meta failed to honor statements in its terms of service and "community standards" sections -- including that it would remove fraudulent content.
Meta
sought a dismissal before trial, arguing that the statements in its terms of service and community standards impose rules on Facebook users, as opposed to obligations on the company.
advertisement
advertisement
U.S. District Court Judge Jeffrey White in the Northern District of California sided against the platform, ruling in September that the allegations -- if proven true -- could support
claims that Meta broke its contract with users and violated its duty of good faith.
Meta then sought review by the 9th Circuit, arguing that appellate judges should decide
whether terms of service and "community standards" create a "legally enforceable obligation to combat purported scam advertisements."
The social platform said in its petition
that the outcome of the dispute will have "profound implications."
"The fundamental question in this case is whether Meta can be held contractually liable for moderating (or
not) content posted to Facebook by third parties," the company argued in its petition. "Given that there are hundreds of millions of Facebook users in the United States and literally billions of
pieces of content posted to the site every day the answer to that question will have profound implications."
Meta is expected to file additional arguments with the 9th Circuit
by April 28.