Editor's take: Meta's latest encounter with legal scrutiny highlights ongoing tensions around advertising metrics and privacy in the digital ecosystem. As scrutiny grows, advertisers and industry observers are watching closely to see how tech platforms might change their reporting practices and data management in response.
Questions are mounting about the reliability of Meta's advertising metrics and data practices after new claims surfaced at a London employment tribunal this week. A former Meta product manager alleged that the social media giant inflated key metrics and sidestepped strict privacy controls set by Apple, raising concerns among advertisers and regulators about transparency in the industry.
In legal documents submitted Wednesday, Samujjal Purkayastha, Meta's former product manager, claimed the company misled advertisers regarding the performance of its Shops Ads – a service introduced in 2022 for brands hosting digital storefronts on Facebook and Instagram. According to Purkayastha, Meta calculated results using gross sales rather than net sales, a method he said contrasts with the way other ad products – like those from Google – exclude shipping and tax amounts in performance figures.
The internal discrepancy, Purkayastha alleges, resulted in Shops Ads performance being reported 17 to 19 percent higher than actual outcomes. "An internal investigation had found that the performance of Shops Ads had been inflated," he stated in the tribunal filings. The company allegedly failed to disclose these issues to brands, despite being aware of the gap.
In response, Meta argued that sales figures were provided directly by advertisers and the company was unaware whether those amounts included tax or shipping charges. "The value of a sale was self-reported by advertisers and Meta did not know whether this included or excluded tax and shipping costs," a Meta staff member wrote in a witness statement.
The tribunal also heard claims that Meta bypassed Apple's App Tracking Transparency (ATT) rules, which require user consent before tracking their activity across iPhone apps. After Apple introduced ATT in 2021, most users opted out of tracking, leading to a significant reduction in Meta's ability to gather information for targeted advertising. Company investors were told this would trim revenues by about $10 billion in 2022.
Purkayastha alleges Meta responded by relying more heavily on Shops Ads to rebuild user datasets, supplementing this with machine learning to predict user activities – though he asserted that these efforts did not overcome "signal loss" issues. Instead, a covert team at Meta is accused of using "deterministic matching," which involves gathering identifying information to cross-link data between platforms, potentially violating Apple's rules.
The financial mechanics of Shops Ads came under further scrutiny with allegations that Meta failed to disclose substantial subsidies for the product. During testing, free ad placements were reportedly funded by a $160 million budget personally authorized by CEO Mark Zuckerberg. The company stated that subsidies had been "widely known within Meta" and referenced publicly in support material.
Purkayastha was dismissed from the Facebook parent in February, part of a broader round of layoffs. He contends that his firing was due to whistleblowing on these practices and argues that health issues cited by Meta were not sufficient grounds for termination. The social media firm, however, characterized his complaints as "routine commercial matters," denying any wrongdoing or retaliatory conduct.
Employment judge Timothy Adkin concluded that Purkayastha's claim could have merit, though his request for interim relief was denied, noting it remains unclear whether his dismissal was due to performance or broader staffing decisions. A full hearing is scheduled next year.
"We are actively defending these proceedings …" a Meta spokesperson told The Financial Times. "Allegations related to the integrity of our advertising practices are without merit and we have full confidence in our performance review processes."