Facebook knew its user numbers were unreliable, and artificially high, but ignored the problem in order to generate more advertising revenue, companies say, according to legal documents released Wednesday.
"These are revenues that should never have been obtained because they were based on false data,"
said an employee in an internal email, according to documents consulted by AFP.
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The social media giant has been facing class action lawsuits since 2018.
The plaintiffs say that the platform's executives knew that its so-called “Potential Reach” measure was inflated, but did not seek to rectify the situation so as not to lose revenue.
The California-based company derives the overwhelming majority of its revenue from the sale of targeted advertising space to advertisers.
Prices vary based on many criteria, starting with the number of users likely to see the campaign.
“Facebook knew their Potential Reach was inflated and deceptive.
(...)
Facebook knew that the problem was largely caused by fake accounts and duplicates.
(...)
Managers prevented employees from repairing the problem because they thought that
"the impact on income (would be) significant", detail the complainants.
They quote the manager of "Potential Reach" on the revenue that Facebook
"should never have had"
and another who wonders
"how long we can get by with the overestimation of the
(audience)
reach
"
.
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In March 2019, the social network changed its measurement.
The potential reach is no longer based on active users but on the number of people who have seen an advertisement for one of the firm's products during the past thirty days.
Facebook did not immediately respond to an AFP solicitation.
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.
Google, the number 1 in this market, and Facebook, the number 2, face lawsuits from the federal authorities for abuse of a dominant position.