Meta, the parent company of Facebook and Instagram, is facing a massive $7 billion lawsuit from advertisers who claim that the social media giant inflated ad viewership figures. The advertisers allege that Meta exaggerated the number of viewers their ads received by up to 400%, leading them to pay higher premiums for ad placements on the platforms.
At the center of the lawsuit is Meta’s use of the Potential Reach metric to determine advertising costs. The advertisers argue that this metric relies on the total number of social media accounts, including bot and fake accounts, rather than individual users. As a result, they claim that advertisers are paying more money for their ads to be served to non-existent or irrelevant viewers.
Meta has vehemently denied these allegations, stating that the price advertisers are charged is based on performance metrics and not the Potential Reach metric as claimed in the lawsuit. A spokesperson for Meta called the allegations baseless and stated that they would vigorously defend themselves against the lawsuit.
On the other hand, Geoffrey Graber, lead counsel representing the advertisers, expressed confidence in their case. He stated that they look forward to presenting evidence to a jury that Meta knew about the inflated Potential Reach metric and refused to address the issue due to revenue concerns.
The implications of this lawsuit are significant for millions of advertisers who may have overpaid for ad placements on Instagram and Facebook. If the case proceeds to trial, more affected advertisers could come forward to claim compensation for their losses.
The legal battle began in 2018 when former Meta advertisers DZ Reserve and Cain Maxwell filed a complaint against the company. DZ Reserve has since ceased operations with Meta, and it is unclear if Maxwell’s business is still operational. In 2024, the 9th U.S. Circuit Court of Appeals in San Francisco ruled that the case could proceed, allowing the advertisers to pursue monetary damages from Meta.
The next steps in this case will either involve a trial or a settlement that provides financial compensation to the plaintiffs. Advertisers, industry experts, and users will be closely watching the outcome of this lawsuit, as it could have far-reaching implications for the advertising industry and the trust users place in social media platforms.
In conclusion, Meta’s $7 billion lawsuit over alleged inflation of ad viewership is a significant development that has caught the attention of advertisers and industry experts alike. The outcome of this case will have implications for the advertising industry and may prompt a reassessment of how metrics are used to determine ad costs. As the legal battle unfolds, advertisers affected by this alleged inflation will be eagerly awaiting a resolution that could potentially provide them with compensation for their losses.
