US Supreme Court declines Meta's appeal, $7 bn ad fraud case to proceed

The case accuses Meta, the parent company of both Facebook and Instagram, of overcharging by fraudulently inflating the potential reach of advertisements on these platforms

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New Delhi: The US Supreme Court has declined to hear an appeal from Meta Platforms, allowing a $7 billion class action lawsuit by advertisers to move forward. 

The case accuses Meta, the parent company of both Facebook and Instagram, of overcharging by fraudulently inflating the potential reach of advertisements on these platforms.

The decision comes after a three-judge panel at the San Francisco-based 9th US Circuit Court of Appeals ruled 2-1 in March 2024, supporting the advertisers' claims. The lawsuit, led by former Meta advertisers DZ Reserve and Cain Maxwell, alleges that Meta misrepresented the number of social media accounts as the number of actual people, thereby inflating potential ad viewership by as much as 400%.

This case centres around the "common course of conduct" test, which the 9th Circuit found applicable, arguing that because Meta consistently provided the same alleged misrepresentation, the damages could be considered collectively under class action. Meta had contested this, asserting that not all advertisers were similarly affected or misled, a point now left unanswered by the Supreme Court's refusal to hear the case.

This legal battle is part of a broader scrutiny Meta has faced over privacy and data handling practices, particularly in light of the Cambridge Analytica scandal. However, this case specifically deals with advertising metrics and the integrity of how Meta reports potential ad reach to its advertisers.

The case now returns to the District Court where details will be further hashed out, including discovery, where both sides will present evidence. 

 

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