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US Senator calls for government investigation into Facebook

US Senator Elizabeth Warren has urged the Securities and Exchange Commission and the Justice Department to investigate whether Facebook "misled investors, the SEC, its advertising customers, and the public about the reach of its advertisements".

US Senator calls for government investigation into Facebook
US Senator Elizabeth Warren. Photograph: United States Senate, via Wikimedia Commons.

A group of advertisers is currently suing the social network, claiming it overstated the potential reach of campaigns, and Warren said: "Facebook is not above the law. The company’s executives cannot mislead investors, the SEC, its advertising customers, and the public about a core metric of its business model with impunity if such actions violate federal wire fraud or securities laws.”

“Facebook’s internal documents show that Facebook personnel knew for years that the Potential Reach metric that it provides to Facebook advertisers on its advertisement purchasing interfaces (including on Ads Manager and Power Editor) was inflated and misleading,” the advertisers allege in a complaint filed in court last year.

“Notwithstanding their own internal acknowledgement that Potential Reach was inflated, Facebook executives did nothing,” the complaint alleges. “Instead, Facebook took steps to obfuscate the issue, and even to cover it up.”

It adds, “Facebook never acknowledged externally what it admitted internally: that its Potential Reach metric was inflated, and that the inflation was partly due to duplicate and fake accounts.”

These allegations first arose in 2017 when the Video Advertising Bureau pointed out that Facebook’s estimates of audience reach in each US state exceed the states’ populations.

Facebook has argued, however, that estimates about audience reach are not guarantees and do not affect billing.

Warren’s letter came the day after another US Senator, Maria Cantwell, urged the Federal Trade Commission to investigate Facebook over claims it has made over its ad metrics.

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