Class Action Alleges Meta Platforms Made False, Misleading Statements on Digital Ad Reach, Audience Size

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A proposed class action lawsuit alleges Meta Platforms has made false and misleading statements with regard to the number of people on Facebook and how many of those people see the digital ads sold by the company. 

The plaintiff, an Illinois-based competitor of the defendant who sells digital and targeted ads that appear on a local news website, alleges in the 43-page suit that Meta Platforms has not been forthcoming with regard to certain key metrics shared with potential customers who consider buying ads from the company. 

The case alleges Meta has issued the supposedly false and misleading statements at issue to “unfairly compete” with other digital ad brokers, such as the plaintiff. 

“Meta has, for years, willfully made and had direct knowledge of its false and/or misleading statements, internally discussed changing its statements, and willfully chose not to do so to avoid losing customers and revenue,” the lawsuit says. 

For one, the plaintiff alleges, Meta has understated the number of duplicate accounts and false accounts on its platform, and overstated the number of monthly active users in the U.S. and Canada. The case claims Meta has also overstated and “falsely describ[ed]” the potential reach, estimated audience size and achieved reach of advertising campaigns on the platform. 

According to the lawsuit, Meta did so in order to influence potential advertisers to buy, and continue buying, the company’s main product, digital advertising. 

“Meta has been paid hundreds of billions of dollars for digital advertising over the past three years and, as such, has become one of the world’s most valuable companies. As a result of Meta’s false and/or misleading statements, however, [the plaintiff] and the class of similarly situated competitors have been, and/or are likely to be, injured by diversion of their sales to Meta, or by lessening of the goodwill associated with their products in light of the false and/or misleading statements Meta has made, and continues to make, about its audience size and delivery of advertisements to people.” 

One mile marker in the complaint is Meta’s replacement of the “potential reach” metric with an “estimated audience size” metric, a switch the company explained was made to make the potential reach figure a range that would be consistent with the format of the estimated daily reach results received by customers. Sometime between roughly late October 2021 and the present, the suit says, Meta added language in a second popup window that appeared when a user clicked on the “people” link within a disclosure explaining the estimated audience size. 

That language, the case states, constituted the first disclosure by Meta that it “double-counts” the same person in its “estimated audience size” if that person has both a Facebook and Instagram account that are not linked. 

“Upon information and belief, prior to this statement, Meta did not previously disclose that it was counting as multiple ‘people’ in the Potential Reach/Estimated Audience Size metric one person who could take actions on separate accounts,” the filing states, alleging Meta has continued to fail to disclose whether the “estimated audience size” figure it provides includes double-counted people with duplicate Facebook accounts, or “people” with false accounts. 

Per the suit, Meta has used the same tactic in its disclosures regarding the “reach” of the ads that run on its platform. The foregoing “people” explanation, according to the lawsuit, amounts to the first time Meta disclosed that it double-counts the same person in its “reach” metrics if that person has both a Facebook and Instagram account that are not linked. 

The lawsuit looks to cover all persons and entities in the United States who, within the applicable statute of limitations period and until class certification, operated a website or phone app and sold advertisements to third parties to display on the website or app. 

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