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Meta inflated a crucial advertising metric by nearly 20 per cent and deliberately bypassed privacy rules on Apple iPhones in a bid to boost revenues, a former staff member has told an employment tribunal.
The social media platform is alleged to have misled advertisers over the financial performance of its “Shops Ads” — adverts introduced in 2022 for brands that host digital storefronts on Facebook and Instagram — by using gross rather than net sales figures, according to legal filings submitted on Wednesday.
Former Meta product manager Samujjal Purkayastha said the approach contrasts to how it calculated the performance of non-shopping advertising, which typically excluded the value of shipping and taxes, as well as the approach typically taken by rivals such as Google.
He claimed Meta was aware of the discrepancy but failed to disclose it to brands, alleging that an internal investigation had found that the performance of Shops Ads had been inflated by between 17 and 19 per cent.
Meta also secretly linked user data with other information to track users’ activity on other websites without their permission — despite Apple in 2021 introducing measures explicitly requiring consent, according to Purkayastha’s filings.
The claims were part of an application submitted to the Central London Employment Tribunal by Purkayastha to remain an employee until his claim of unfair dismissal had been adjudicated. The former Meta product manager said he was laid off in February this year after repeatedly raising concerns internally at Meta about the practices.
On Wednesday, employment judge Timothy Adkin said Purkayastha’s case could succeed on its merits but that an application for interim relief would not proceed as he may have been dismissed as a result of personal factors or a wider employee lay-off. A full hearing is still expected in the coming year.
The social media network in its response said it had no “interest in retaliating” against Purkayastha and that it considered the issues he raised “routine commercial matters” that “did not indicate any wrongdoing or breach of legal obligations”.
In a witness statement submitted to the tribunal, a different Meta employee said that the value of a sale was self-reported by advertisers and that the social media group did not know whether this included or excluded tax and shipping costs.
Meta has long faced scrutiny over its advertising metrics, including a class-action lawsuit claiming its so-called Potential Reach metric, used to inform advertisers of their potential audience size, was knowingly inflated.
Purkayastha was laid off earlier this year alongside roughly 5 per cent of Meta’s workforce after chief executive Mark Zuckerberg told employees he planned to “raise the bar on performance management and move out low performers faster”.
The social media platform said Purkayastha was dismissed after his “performance did drop” and that “he did have weaknesses which were beginning to show” alongside “significant health and other personal issues”.
Purkayastha acknowledged several health and personal issues, which his lawyer described as “uniquely stressful” but maintained that these were was not sufficient grounds for dismissal.
Purkayastha said that Meta was relying on Shops Ads to build more user data after Apple in 2021 introduced a feature called App Tracking Transparency (ATT), which banned apps and advertisers from collecting information about iPhone owners without their explicit consent.
Most Apple users declined to grant permission, severely restricting advertisers’ ability to track users’ behaviour on their device to target ads.
Former Meta CFO David Wehner told investors in 2022 that the company estimated the move would impact its revenues by approximately $10bn that year.
Purkayastha said the financial losses from Apple’s privacy changes meant Meta was “motivated to drive Shops Ads as a product” and that “misleading and inflated Shops Ads performance metrics would further this objective”.
The former Meta product manager said the company had also failed to disclose to ad buyers that the service was heavily subsidised, claiming that Zuckerberg personally authorised a $160mn budget to fund free ad placements during the testing of the ads, further skewing results.
In the witness statement submitted on behalf of Meta, the issue of subsidies was described as “widely known within Meta” and that “possible adjustments” were referred to publicly in an online help centre.
Purkayastha said that Meta sought to use machine learning to predict users’ likely activity, but that this failed to adequately address “signal loss” — where it was unable to track user activity across multiple platforms.
Instead, a “closed and secretive” team at Meta is alleged to have used “deterministic matching” — gathering identifiable information that could then be used to connect data across multiple platforms in violation of Apple’s new privacy policies.
Meta did not respond to claims it circumvented Apple’s ATT rules during Wednesday’s session.