In a contentious decision, the 9th US Circuit Court of Appeals in San Francisco ruled in favor of advertisers, allowing them to pursue a class-action lawsuit against Meta Platforms, the parent company of Facebook and Instagram. The lawsuit accuses Meta of overcharging advertisers by artificially inflating the potential reach of their ads.
The ruling, split 2-1, enables advertisers to collectively seek damages over Meta’s alleged misrepresentation of ad reach metrics. Advertisers argue that Meta’s metrics, specifically the “potential reach” of ads, were misleading as they counted social media accounts rather than actual individuals, potentially inflating viewer numbers by up to 400%.
Despite this victory for advertisers, the court also ruled to decertify a separate class seeking injunctive relief, effectively barring advertisers from suing as a group for non-monetary remedies. The decision stemmed from uncertainties regarding the legal standing of the main plaintiff.
Read more: Meta Platforms Cuts Subscription EU Fees Amid Regulatory Pressure
Meta Platforms, headquartered in Menlo Park, California, relies heavily on advertising revenue, which amounted to a staggering $134.9 billion in 2023, with a net income of $39.1 billion. The lawsuit’s outcome could significantly impact Meta’s financial standing and advertising practices.
Circuit Judge Sidney Thomas, speaking for the majority, emphasized Meta’s consistent use of the allegedly deceptive metric, providing grounds for advertisers to prove damages resulting from a shared course of conduct. The ruling highlights the potential for class actions to offer more significant recoveries for plaintiffs while minimizing individual legal costs.
While this decision represents a setback for Meta Platforms, the company is likely to continue its legal battle as it navigates the complex landscape of advertising practices and consumer protection regulations.
Source: Reuters
Featured News
Judge Mehta Questions Both Sides in Landmark Google Antitrust Case
May 2, 2024 by
CPI
FCC Urges Urgent Funding for Removal of Chinese Telecom Equipment from U.S. Networks
May 2, 2024 by
CPI
Former Pioneer CEO Facing Potential Criminal Charges For Colluding With OPEC
May 2, 2024 by
CPI
South Korea’s Antitrust Regulator Greenlights K-Pop Powerhouse Deal
May 2, 2024 by
CPI
Exxon’s Pioneer Purchase Approved, Former CEO Barred from Board
May 2, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI