Meta Platforms, Inc.
“Meta’s investors suffered historically large losses during the period at issue, including a one-day 26% drop in the value of their shares, due to a series of outright misrepresentations made by Meta. We are anxious to recover these losses from a company that far too often has been plagued by misconduct.”
Austin P. Van
Austin P. Van
On June 6, 2022, U.S. District Judge Yvonne Gonzalez Rogers of the Northern District of California appointed Pomerantz LLP as Lead Counsel on behalf of the Lead Plaintiffs – Menora Mivtachim Insurance Ltd., Menora Mivtachim Pensions and Gemel Ltd., The Phoenix Insurance Company, Ltd., and The Phoenix Provident Pension Fund Ltd. – and the class, in Plumbers and Steamfitters Local 60 Pension Trust v. Meta Platforms, Inc., 22-cv-1470 (N.D. Cal.).
Allegations against Meta include that: (i) the iOS privacy changes had a material impact on Meta’s ability to provide the kind of targeted advertising that was a necessary function of its business model; (ii) as a result, customer ad spending significantly dropped; (iii) the Company’s so-called “mitigation efforts” were not properly implemented or were ineffective; (iv) Meta failed to curate a plan to properly address the impact of the iOS privacy changes; and (v) the Company failed to disclose known trends related to an exodus of Facebook and Instagram users to rival social media platform TikTok.
Meta (formerly known as Facebook, Inc.) owns Instagram, WhatsApp and Facebook, the largest online social network with more than 3 billion users worldwide. The Company heavily relies on third-party advertising via these platforms to create revenue, and in fact, almost all of Meta’s profit is generated from selling ads to business seeking the attention of Facebook and Instagram users.
Historically, a significant portion of Meta’s ad sales were targeted toward users who accessed the Company’s social media platforms through their iPhones. Meta’s success in this regard was enabled by the Company’s utilization of data about users obtained by tracking their other activities—i.e., by harvesting information gleaned from other, non-Meta sources on their users’ iPhones. Meta has previously admitted that its “advertising revenue is dependent on targeting and measurement tools that incorporate data signals from user activity on websites and services that we do not control[.]”
In June 2020, Apple announced a host of privacy-oriented changes to the iOS operating software that runs iPhones, aimed at giving iPhone users more control over their own privacy and the data associated with their iPhone usage. Apple’s new privacy protections were a sea change to Meta’s advertising model, as they would essentially cut off Facebook and its sister services from nearly all of the tracking and targeting abilities and information they required to sell targeted ads, as they had done for years.
While Meta executives publicly acknowledged that Apple’s changes would likely have a negative impact on its business model, they failed to properly convey just how severely the Company’s advertising revenue would be affected. In an attempt to make the situation appear “manageable,” Meta implemented new advertiser-friendly strategies, such as requiring less data for targeted ad campaigns and bolstering automation, allowing advertisers to use machine learning to find audiences for targeted campaigns, amongst other tactics; however, when Meta released its Q4 2021 results on February 2, 2022, the truth was revealed.
Meta’s weak Q4 2021 financial results included a $10 billion loss in revenue caused by the iOS privacy changes, as well as disappointing 2022 revenue guidance. The Company also attributed its weak results and guidance to slowing user growth due to competition from TikTok. On this news, Meta’s share price fell $85.24 per share, or 26.4%, to close at $237.76 per share on February 3, 2022.
Pomerantz’s Meta Platforms, Inc. litigation is led by partners Jeremy A. Lieberman, Jennifer Pafiti and Austin Van, with attorney Thomas H. Przybylowski.
Plumbers and Steamfitters Local 60 Pension Trust v. Meta Platforms, Inc., 3:22-cv-01470 (N.D. Cal.)
Class Period: March 2, 2021 - February 2, 2022, both dates inclusive
For violations of the Securities Exchange Act of 1934