Meta’s Advertisers Seek Billions in Damages
Supreme Court Rejects Meta’s Appeal
In a significant blow to Meta Platforms, the US Supreme Court has refused to hear the company’s appeal to avoid a massive class-action lawsuit filed by advertisers. The lawsuit accuses Meta of inflating the number of people its ads could reach, resulting in billions of dollars in overcharges.
Advertisers Unite Against Meta
The lawsuit, led by former Meta advertisers DZ Reserve and Cain Maxwell, claims that Meta fraudulently overestimated the potential viewers of its ads by as much as 400%. The plaintiffs argue that Meta focused on the number of social media accounts rather than the actual number of people, leading to significant overcharging.
A Common Course of Conduct
A three-judge panel of the 9th US Circuit Court of Appeals ruled in favor of the advertisers, stating that because Meta provided the same alleged misrepresentation about the potential reach of its ads, the advertisers could seek damages as a group. This decision allows the class action to move forward, potentially covering millions of individuals and businesses that have paid for ads on Facebook and Instagram since August 15, 2014.
Meta’s Revenue at Stake
Ads generate nearly all of Meta’s revenue, which totaled $116.1 billion in the first nine months of 2024. The potential damages in this lawsuit could exceed $7 billion, making it a significant threat to Meta’s bottom line.
Meta’s Appeal Rejected
In its appeal, Meta argued that the “common course of conduct” test was flawed and that some advertisers may have found its alleged misrepresentation immaterial or chosen not to rely on it. However, the Supreme Court has rejected this appeal, paving the way for the lawsuit to proceed.
The Road Ahead
The outcome of this lawsuit could have significant implications for Meta and its advertising practices. As the case moves forward, advertisers will be watching closely to see if they can recover billions of dollars in damages from the social media giant.
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