Facebook misled clients for years regarding its projected advertising reach, with top executives such as COO Sheryl Sandberg fully aware of the activity, a lawsuit released Wednesday claims.
“Facebook knew for years its Potential Reach [metric] was misleading, and concealed that fact to preserve its own bottom line,” according to the latest filing this week from a lawsuit originally filed in 2018. The lawsuit was filed by clients who bought advertising on Facebook and Instagram based on the allegedly false data.
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The lawsuit claims that the inflated advertising reach occurred largely due to fake and duplicate accounts on Facebook, but the company made a “deliberate decision” not to remove such accounts from the ad-reach metric. Senior executives at the social media giant, the lawsuit said, blocked employees from fixing the problem because it believed the “revenue impact [would be] significant.”
According to the lawsuit, in 2017, Sandberg herself “acknowledged in an internal email she had known about problems with Potential Reach for years.”
Facebook says that the Potential Reach advertising metric being contested does not play a significant role in the billing or actual delivery of ads. The company downplays the metric as merely a “free tool” for advertisers to be aware of, whether or not they buy an ad, the lawsuit said.
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However, Facebook internal documents presented in the lawsuit show the social media giant long considered the metric to be “arguably the single most important number.”
