The Supreme Court on Monday declined to hear Meta’s appeal in a massive class-action lawsuit alleging that Facebook and Instagram inflated their advertising reach metrics. This decision allows the lawsuit to proceed, potentially exposing Meta to billions of dollars in damages. Advertisers claim Meta fraudulently inflated its “potential reach” numbers by up to 400% by counting multiple accounts belonging to the same user. This case, which covers ads purchased since August 15, 2014, could impact millions of businesses and individuals.
The 9th Circuit Court of Appeals previously ruled that advertisers could pursue damages as a group, finding that Meta’s alleged misrepresentation was consistent across all affected parties. Meta argued that different advertisers might have valued or relied on the reach metrics differently, but the court rejected this argument. This lawsuit raises serious concerns about the accuracy and reliability of the metrics that advertisers rely on to make crucial budgeting decisions when advertising on social media platforms.
The potential damages in this class-action lawsuit could exceed $7 billion. Meta generated $116.1 billion in ad revenue in the first nine months of 2024, highlighting the significance of advertising revenue to the company’s financial success. The outcome of this case will have a substantial impact on Meta’s future and could potentially lead to increased transparency and accountability in how social media platforms report advertising reach metrics.
This decision could have broader implications for the entire social media industry, potentially prompting other platforms to review their own advertising metrics and improve transparency for advertisers. It also raises questions about the extent to which companies can be held accountable for the accuracy of the data they provide to their customers.