Senator Cantwell calls on FTC to investigate allegations Facebook misled ad customers, the public about platform security and ad reach

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Press release | San. Maria Cantwell (D-Washington)

U.S. Senator Maria Cantwell (D-Washington), chair of the Trade, Science and Transportation Committee, wrote to Federal Trade Commission (FTC) Chairperson Lina Khan urging the FTC to investigate the allegations according to which Meta / Facebook has misled its advertising clients and the public into its claims regarding the safety of the brand and the scope of its advertisements, in violation of Federal law prohibiting unfair or deceptive acts or practices in commerce or trade. trade.

The letter is below and here.

December 8, 2021
The Honorable Lina Khan
Chair
United States Federal Trade Commission
600 Pennsylvania Ave. NO
Washington, DC 20580

Dear President Khan:

I am writing to you regarding allegations that Meta (f / k / a Facebook, hereinafter “Facebook”) may have violated the Federal Trade Commission Act prohibition against unfair or deceptive acts or practices in commerce or commerce , and I urge the Federal Trade Commission (“FTC” or “Commission”) to initiate an investigation into these matters. Recent disclosures and public documents suggest that Facebook may have misled its ad clients and the public about its processes to ensure brand safety and the reach of its ads, two critical aspects of Facebook’s business model. .

Facebook’s representations to advertisers take on even more importance given Facebook’s significant share in the digital advertising space. As the Senate Commerce Committee detailed in a 2020 report, Facebook reportedly controlled about 74% of the social media market and now controls 24.1% of all digital advertising spending in the United States; Facebook’s dominance in the advertising market means that advertisers and publishers, including struggling local media outlets across the country, may have faced unfair competition from Facebook, impacting their revenue and performance. ability to compete online.

Facebook has a long history of claiming the safety of its product for brands and, more importantly, the safety of its product for Facebook users. For example, Facebook said that it “invests[s] in technology to… help identify content that violates [its] policies – often before anyone sees it. And [it] release regularly[s] the report on the application of community standards to monitor [its] progress in making Facebook safe and inclusive. Facebook’s Community Standards Enforcement report says its algorithms remove 97% of the content it ultimately removes for hate speech before the content is published. But the move could dramatically distort the effectiveness of Facebook’s algorithms, as whistleblower documents show Facebook estimates that its processes are missing more than 90% of hate speech content, despite being 97% effective. to capture the hate speech that Facebook ends up suppressing. Facebook may therefore have made false statements or significant omissions to advertisers regarding the effectiveness of its brand security controls, including its ability to remove criminal content. A recent rollout of additional branded security tools claims that brands that “[e]xcluded the categories of Tragedy and Conflict ”with the new tool“ were able to avoid the contiguity of Tragedy and Conflict 99% of the time ”. If experience is any guide, these latter claims with advertisers can also be broken down under a microscope.

Until recently, Facebook offered potential advertisers two key metrics of an ad’s potential success: (1) Potential reach; and (2) Estimated daily range. Potential reach (which is a component of estimated daily reach) approximates the number of people in a particular area who can see a business’s ad and, according to Facebook, is “arguably the most significant number in our interfaces. creation of advertisements “. Naturally, advertisers of all sizes plan and budget for campaigns that maximize the potential reach of their ads, as estimated by Facebook. However, public reports as well as Facebook’s own statements and documents seem to indicate that Facebook may have been aware that the potential reach metrics may have been inaccurate. Public analysis dating back to 2017 shows how Facebook claimed its ads could potentially have more reach than the 18- to 34-year-old population counted in each of the 50 states by the US Census Bureau.

The Commission may allege deception under Section 5 of the FTC Prohibiting Unfair and Deceptive Practices in or Affecting Commerce, “if there is any statement, omission or practice that could mislead the consumer acting reasonably in the circumstances to the detriment of the consumer. “So, because the evidence suggests that Facebook may have deceived its advertising customers about its brand safety and advertising measures, Facebook may have engaged in deceptive practices in violation of the FTC law.

Additionally, public information suggests that Facebook’s potential misrepresentation about brand safety and advertising measures may be unfair, as well as misleading. In assessing whether the conduct is unfair, the Commission may consider (1) that advertising purchased by brands due to brand safety and Facebook’s advertising representations to be “material”; (2) the absence of significant compensatory advantages for competition and consumers from any misrepresentation of advertising parameters; and (3) that, since Facebook uses a walled garden system, advertisers could not have independently verified the brand safety activities reported by Facebook, the advertising measures or reasonably avoided advertising on Facebook, and even less given the market dominance of Facebook.

A thorough investigation by the Commission and other enforcement agencies is paramount, not only because Facebook and its executives may have broken federal law, but because members of the public and businesses have a right to know the facts about Facebook’s conduct when making decisions about using the platform.

I urge the FTC to immediately open an investigation into Facebook’s claims regarding brand safety, potential reach, and similar actions regarding its advertising activities and, if this investigation reveals that the company has in fact violated the law, to pursue all sanctions if necessary. Such actions could include an action under Section 19 of the FTC or partnering with state attorneys general in an appropriate court to obtain financial redress for Facebook advertisers and restitution for ill-gotten gains. Facebook, a strategy the Commission has pursued in other recent cases.

Thank you for your attention to this important matter.

CC: Commissioners Rebecca Kelly Slaughter, Noah Joshua Phillips and Christine S. Wilson, Federal Trade Commission


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