An overwhelming majority of Facebook's revenue comes from the sale of advertising space.
The prices of these inserts are based on several criteria, starting with the number of users likely to see the campaign.
And that's the rub.
Since 2018, a group action has been launched against the social media giant.
The complainants claim that the platform's executives knew that its so-called “Potential reach” measure overestimated the potential audience for advertising campaigns.
However, they did not seek to rectify the situation so as not to lose income.
According to several documents, Facebook was well aware that these estimates of its user count were unreliable and artificially high.
However, according to the complainants, the social network thus generated advertising revenue that was not justified.
“Facebook knew that its
Potential Reach
was inflated and misleading.
Facebook knew that the problem was largely caused by fake accounts and duplicates.
Executives prevented employees from fixing the problem because they thought the impact on revenues would be significant, ”the complainants add.
"Income that should never have been"
An opinion reinforced by an internal e-mail from an employee of Facebook, added to the file: "These are revenues that should never have been had because they were based on false data", notes in this message the person concerned.
Obviously, the platform defends itself against any bad intentions.
“These documents were selected to match the story told by the complainant.
The
Potential reach
is a country planning tool that is never used to charge advertisers, "responded Joe Osborne, a spokesman for Facebook.
He added: “It's an estimate and we clearly explain how it is calculated on our advertising interface.
"
In March 2019, the social network changed the measure of potential reach which is no longer based on active users but on the number of people who have seen an advertisement on one of the firm's products during the 30 days gone by.
In 2020, the group achieved nearly 86 billion dollars in turnover, and generated more than 29 billion in profits, up 58%.
According to eMarketer, the platform family is expected to reach 96.6 billion net advertising revenue in 2021, or 24.4% of the global market.
