Law Street Media

Users Sue Facebook Over Deceptive Advertising Practices in NDCA Class Action

Facebook's app icon on a smartphoen screen.

Bangkok, Thailand - July 13, 2019 : iPhone user touching Facebook logo on iPhone screen to open the app.

Social media platform Facebook has been served with a lawsuit accusing it of actively soliciting and assisting scammers for its own financial gain and to users’ detriment. Wednesday’s complaint claims that Facebook should do more to reign in deceptive ads on its platform, like those purporting to sell “shady” products such as diet pills featuring fake celebrity endorsements.

The filing explains that Facebook collects data from its users without compensation, which in turn enables the company to sell “precisely targeted ads” to advertisers, some of whom are unscrupulous. Specifically, “[s]cammers discovered they could exploit these targeting capabilities to get deceptive, false and/or misleading ads viewed by the Facebook users most likely to click those ads and be lured into bait-and-switch and other fraudulent schemes.”

Facebook reportedly profits from advertisements placed on its site and therefore lacks incentive to curb practices that defraud its users. The complaint points to several investigative reports finding that Facebook facilitates scams, notwithstanding ad policies and guidelines that prohibit deceptive practices. For example, the complaint cites an internal study concluding that 30% of ads placed by Chinese advertising clients violated at least one Facebook ad policy, representing nearly $2.6 billion in revenue in 2020 alone.

The filing seeks certification of an injunctive relief class consisting of all Facebook users and a second damages sub-class consisting of all users who clicked on a deceptive ad and “suffered harm” since Aug. 11, 2017. As for the requested injunctive relief, the plaintiff asks that Facebook take more precautionary measures to screen advertisers, particularly those in “based in China and other countries where a material percentage of ads violate Facebook’s ad policies.” In particular, Facebook should prevent repeat offenders from continuing to display scam ads, timely processing and addressing scam reports, and promptly identifying and removing such ads, the complaint says.

The filing states four claims for relief under common and state law including negligence, breach of contract, unjust enrichment, and violation of California’s Unfair Competition Law. The plaintiff and putative class seek not only injunctive and declaratory relief, but also disgorgement, damages, and their attorneys’ fees and costs.

The Facebook user is represented by Levi & Korsinsky LLP.

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