March 20, 2020

Social-media giant says estimates weren’t guarantees, didn’t harm customers; court filing includes employee worrying about possible lawsuit in email

Facebook Inc. employees were aware that the company was overestimating how many people advertisers could reach, according to an amended complaint filed this week in a nearly two-year-old lawsuit accusing the company of misrepresenting that data.

“This is a lawsuit waiting to happen,” a Facebook product manager wrote to colleagues in October 2018, regarding the company’s alleged overstatements, according to the amended complaint filed Thursday. The emails were produced as part of the discovery process in the lawsuit, which is seeking class-action status and was originally filed by a small-business owner in federal court in San Francisco in 2018.

A Facebook spokesman declined to comment on the material in the amended complaint, but the company has previously said the estimates were never meant to be precise guarantees and couldn’t plausibly have harmed customers.

Facebook defines the “potential reach” to advertisers as an estimate of an ad’s target audience. According to the amended lawsuit, Facebook’s potential reach among the 18- to 34-year-old demographic in every state exceeded the actual population of those 18- to 34-years-old.

This isn’t the first time Facebook has been accused of inflating metrics relied upon by advertisers. In 2016, the company disclosed that it had overestimated viewing time for video ads. Advertisers sued after the disclosure, and Facebook later settled that lawsuit, saying it made an error in calculating its metrics and denying the other allegations.

According to the amended lawsuit, Facebook first learned about concerns that it was misleading customers about how many people could see their ads in 2015 but did nothing about it. The complaint says Facebook held at least four meetings in early 2018 to discuss the alleged reach inflation but didn’t provide further details.

In the 2018 email, the product manager likened the alleged overstatement to the 2016 revelation that Facebook’s video viewership statistics were erroneously inflated.

Other employees shared the product manager’s concern, according to the amended lawsuit. “My question lately is: How long can we get away with the reach overestimation?” one employee wrote, according to the Thursday filing.

Some sections of the complaint are redacted, including descriptions of emails written and actions taken allegedly by Chief Operating Officer Sheryl Sandberg and other executives.

The complete article can be accessed here.