Advertisers accuse Meta of secretly inflating Facebook ad prices in class action lawsuit

Meta class action lawsuit overview:

• Who: Iron Tribe Fitness filed a class action lawsuit against Meta Platforms Inc.
• Why: The plaintiff alleges Meta overcharged advertisers on its Facebook platform, earning billions in illicit profits.
• Where: The Meta class action lawsuit was filed in California federal court.

A new class action lawsuit alleges Meta Platforms Inc. systematically overcharged advertisers on its Facebook platform, reaping billions in illicit profits.

Plaintiff Iron Tribe Fitness claims Meta used a flawed “blended price” auction process to price and implement advertisements instead of the “second price” auction process it purported to use.

Iron Tribe Fitness, a UK-based fitness gym operating in the United States, argues that winning bidders paid higher prices than they would have under a “second price” auction.

Iron Tribe wants to represent a nationwide class of all Facebook customers who purchased advertisements during the period when a 2013 coding change allegedly caused the company to overcharge advertising customers.

Meta slow-rolled correction of overcharging issue, class action alleges

Iron Tribe claims Meta slow-rolled the correction of the overcharging issue, which was allegedly identified by the company’s engineers in late 2017, to keep the overcharges secret.

“Facebook engineers changed the auction process in a 2013 update to the software code used to run Facebook’s advertisement auctions,” the Meta class action lawsuit says. “This update introduced the ‘blended price’ auction with no disclosure to advertisers.”

Iron Tribe claims Meta’s auction process mechanically inflated the prices paid by winning bidders because the company’s auction calculations included the winning bids from advertisers when they should have excluded them.

Further, Iron Tribe argues Facebook’s auction process “exacerbated the harm to advertisers” by incentivizing advertisers to submit higher bids than they otherwise would have, believing they would be protected from overbidding.

Iron Tribe claims Meta is guilty of breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and violations of California’s Unfair Competition Law. 

The plaintiff is demanding class action certification, trial by jury and compensatory relief.

In related news, tech giant Google Inc. recently agreed to a $100 million class action settlement to resolve allegations it overcharged companies for its AdWords advertising service. The lawsuit was originally filed in March 2011.

Do you believe Meta overcharged advertisers on its Facebook platform? Let us know in the comments.

The plaintiff is represented by Jonathan D. Uslaner, Avi Josefson and Michael D. Blatchley of Bernstein Litowitz Berger & Grossmann LLP and Robert E. Bishop and Frank Partnoy of Bishop Partnoy LLP.

The Meta class action lawsuit is Iron Tribe Fitness v. Meta Platforms Inc., Case No. 3:25-cv-03281, in the U.S. District Court for the Northern District of California.

Read About More Class Action Lawsuits & Class Action Settlements:

• Eight Sleep sued for alleged false discounts on luxury bedding products
• SharkNinja recalls 1.8M pressure cookers after 106 people report serious burn injuries
• Influencer marketing class actions target Shein, Celsius and Revolve
• Costco class action alleges iPhones lack required repair, warranty info