Supreme Court lets $7 billion Meta ad fraud case proceed

The Supreme Court on Monday declined to hear Meta’s appeal in a massive class action lawsuit that claimed Facebook and Instagram inflated their advertising reach metrics.

The decision could expose Meta to billions in damages. It raised questions about the accuracy of metrics advertisers rely on when spending money on social platforms.

The big picture. Advertisers allege Meta fraudulently inflated its “potential reach” numbers by up to 400% by counting multiple accounts belonging to the same users.

By the numbers:

• The class action could exceed $7 billion in damages.
• The case covers ads purchased since Aug. 15, 2014.
• Meta generated $116.1 billion in ad revenue in the first 9 months of 2024.
• Millions of individuals and businesses could be part of the class.

Why we care. This lawsuit could expose Meta’s potential overstatement of ad reach by up to 400%. If successful, you could be one of many advertisers compensated as well as the government enforcing more transparent reporting standards across social media platforms.

Additionally, it raises important questions about the reliability of Meta’s measurement metrics that advertisers use to make budget decisions.

Between the lines. The Supreme Court’s decision lets stand a March 2024 ruling from the 9th Circuit Court of Appeals, which said advertisers could pursue damages as a group since Meta’s alleged misrepresentation was consistent across all affected parties.

Meta’s argument. The tech giant claimed that different advertisers may have valued or relied on the reach metrics differently, thus leading to the inflation they see.

Meta also said that the 9th Circuit’s “common course of conduct” test conflicts with other federal courts.

What’s next. The case will now proceed as a class action, potentially affecting millions of Meta advertisers who bought ads over the past decade.

Go deeper. Advertising revenue remains Meta’s primary business driver, making the outcome of this case particularly significant for the company’s future.