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Three Arkansas businesses have taken on Facebook over claims that the social media giant favors large businesses over small ones when it comes to advertising, effectively violating its own standards and advertising policies.
The Facebook advertising class action lawsuit was filed by American Tiger Firearms LLC, Farm Diva LLC, and First Shot LLC — two firearms companies and one store that sells both ammunition and jewelry made from bullets.
They claim that they were blocked from advertising with Facebook because they pay less than larger competitors.
Allegedly, Facebook notified the companies that their ads would be blocked because they “might lead to the use of firearms.” However, the businesses claim that Facebook allows similar posts from larger gun stores, indicating that Facebook applies different standards to advertisers.
The businesses note that Facebook has a monopoly over social media, and that social media is a primary form of advertising. They say that Facebook owns most of the most popular social media sites including Facebook, Instagram, WhatsApp, Facebook Messenger, and others.
They go on to assert that to effectively reach customers, businesses must advertise via social media.
The Facebook ad class action lawsuit asserts that Facebook denies ad space to smaller businesses who pay Facebook less while giving it to larger businesses who can pay more, even when the smaller businesses paid for ad space.
Allegedly, the presence of businesses on Facebook helps it as a company, because the businesses who advertise via Facebook and other social media sites amass a following and people who like and share posts.
The Facebook class action lawsuit then goes on to say that Facebook uses the smaller businesses’ own networks against them, by suggesting ads for bigger businesses to networks amassed by the smaller companies, because Facebook shows ads to groups of people with similar interests.
The small businesses say that they were economically harmed by Facebook’s denial of ad space, because Facebook is “an essential advertising medium,” and they spent time and resources to develop followers on social media.
The Facebook ad class action lawsuit explains that “since friends often share common interests, when someone likes a product or business, that person exposes it to other people who are more likely to have similar preferences than someone picked at random.”
The businesses note that each network created “by the work and expense of a commercial marketer” has a significant inherent value not only to the business, but to Facebook.
The plaintiffs argue that this practice is anticompetitive, and puts smaller businesses at a disadvantage to their larger competitors while taking advantage of the labor of the small businesses to benefit both Facebook and the larger businesses.
The businesses are represented by William P. Creasman and David Slade of Carney Bates & Pulliam PLLC.
The Facebook Ad Space Class Action Lawsuit is American Tiger Firearms LLC, et al. v. Facebook Inc., et al., Case No. 4:19-cv-00388-BRW, in the U.S. District Court for the Eastern District of Arkansas.
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