DZ Reserve et al. v. Meta Platforms

Overview

Cohen Milstein represents advertisers who claim that Meta Platform’s potential reach metric for Facebook and Instagram is false and misleading due to systemic inflation of the potential reach. The certified class of advertisers further allege that because Meta inflated its “potential reach,” they purchased more Facebook and Instagram advertisements and paid a higher price for advertisements than they otherwise would have.

Documents produced by Meta have confirmed that senior executives at the company knew for years that its “potential reach” metric was inflated – yet they failed to do anything, and even took steps to cover up the problem. In fact, in late 2017 and throughout 2018, Facebook executives repeatedly acknowledged “potential reach” was inflated and misleading due to, among other reasons, the fact that “Potential Reach” includes duplicate and fake accounts.

Important Rulings

• On January 13, 2025, The U.S. Supreme Court declined Defendant’s petition to review the Ninth Circuit’s March 21, 2023 opinion affirming class certification.
• On March 21, 2024, the United States Court of Appeals for the Ninth Circuit affirmed the U.S. District Court’s  March 29, 2022 class certification.
• On March 29, 2022, Judge James Donato of the United States District Court for the Northern District of California granted class certification to advertisers in a false advertising, unfair business practices, and fraudulent misrepresentation class action against Meta Platforms Inc. (formally Facebook). Plaintiffs claim that Facebook’s key advertising metrics are false and misleading due to systemic inflation of Facebook’s user base.
• On March 21, 2024, the United States Court of Appeals for the Ninth Circuit affirmed Judge Donato’s March 29, 2022 class certification ruling for the damages class.

Case Background

The core of Meta Platform’s business is its purportedly large user base, which ostensibly enables advertisements placed on Facebook and Instagram to reach a large number of people. In its 2017 annual report, Meta claimed to have 2.13 billion monthly active users globally, with over 240 million monthly active users in the U.S. alone. As a result, in 2017, Meta earned approximately $40 billion from advertising revenue.

Before advertisers make a purchase, Meta claims that the advertisement can potentially reach a specified number of people (“Potential Reach”). Depending on the demographic targeting selected by the advertiser, the “Potential Reach” is often millions of people. Meta also claims that the advertisement will reach an estimated number of people per day (“Estimated Daily Reach”). The “Estimated Daily Reach” is based, in part, on the audience size or “Potential Reach.”

Plaintiffs allege that these foundational representations are false and misleading due to inflation of Facebook and Instagram’s user base. Based on publicly available research and Plaintiffs’ own analysis, Meta may overstate the “Potential Reach” of its advertisements by 200%-400%. For example, among 18-34-year-olds in Chicago, Meta asserted its “Potential Reach” was approximately 4 times (400%) higher than the number of real 18-34 year-olds with Facebook accounts in Chicago.

Plaintiffs further allege that because Meta inflated its “Potential Reach,” Plaintiffs purchased more advertisements from Meta and paid a higher price for advertisements than they otherwise would have.

Documents produced by Meta confirm that senior executives at the company knew for years that its “Potential Reach” metric was inflated – yet they failed to do anything, and even took steps to cover up the problem. In fact, in late 2017 and throughout 2018, Meta executives repeatedly acknowledged “Potential Reach” was inflated and misleading due to, among other reasons, the fact that “Potential Reach” includes duplicate and fake accounts.

Plaintiffs seek compensation and injunctive relief for violations of California’s UCL, breach of the covenant of good faith and fair dealing, fraudulent misrepresentation, fraudulent concealment, and for restitution and punitive damages.

The original case name was: Singer v. Facebook, Case No. 3:18-cv-04978 (N.D. Cal.)

The case name is: DZ Reserve et al. v. Meta Platforms, Case No. 3:18-cv-04978 (N.D. Cal.)