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Facebook Can’t Shake Investor Site’s False Advertising Suit

Feb. 21, 2019, 4:28 PM

Facebook Inc. must face a proposed class action alleging it misled advertisers by failing to live up to its promises that display ads would appear to specifically targeted audiences.

A company that runs a communication site for high-end investors may go forward with its claim that Facebook displayed ads to users not in its targeted demographic, the U.S. District Court for the Northern District of California said.

The court denied Facebook’s motion to dismiss the suit filed by, holding it sufficiently alleged harm under California’s Unfair Competition Law.

Facebook’s argument that it didn’t promise perfect accuracy in delivering ads to the promised targeted audiences weren’t grounds to dismiss, the court said.

Nor was IMB’s failure to specify the number or demographics of people to whom the ad was displayed or who “liked” the page as a result of the campaign. It also didn’t need to provide more detail about how many of its “likes” were purportedly from users outside the target audience, the court said.

IMB operates Investor Village, which offers a platform to investors to communicate about stocks.

The company focuses its marketing on highly educated investors with large incomes and substantial assets.

IMB started two ad campaigns targeting specific types of Facebook users, those with household incomes over $250,000, and those with incomes greater than $500,000.

After launching the campaigns, IMB learned that a substantial number of its ad “likes” came from outside its target audiences.

The company sued, alleging that Facebook, contrary to its representations, “programmatically displayed a material percentage of ads” to users outside the promised markets.

Judge Phyllis J. Hamilton issued the ruling.

Cera LLP, Wohl & Fruchter LLP, and Klafter Olsen & Lesser LLP represents

Latham & Watkins LLP represents Facebook.

The case is v. Facebook, Inc., 2019 BL 56204, N.D. Cal., No. 18-CV-05286, 2/20/19.

To contact the reporter on this story: Peter Hayes in Washington at

To contact the editors responsible for this story: Jo-el J. Meyer at; Steven Patrick at