Facebook has been hit with a lawsuit accusing it of bilking advertisers by inflating the number of people its ads could reach.
"Based on publicly available research and plaintiffs’ own analysis, Facebook overstates the potential reach of its advertisements," business owner Danielle Singer alleges in a class-action complaint filed Wednesday in U.S. District Court for the Northern District of California.
Singer, who owns the Kansas-based business Therapy Threads -- which sells aromatherapy-related products -- says she spent more than $14,000 on Facebook ads between October of 2013 and April of this year.
She alleges that Facebook induced advertisers like herself to purchase ads -- and to pay higher prices for them -- by "vastly" inflating the number of active users the ads could reach. The complaint claims that Facebook violated a California business law.
The complaint draws on reports by outside groups, including the industry organization Video Advertising Bureau, as well as a survey commissioned by the plaintiffs. The Video Advertising Bureau reported last year that Facebook's estimates of audience reach in every U.S. state were higher than the states' populations according to the U.S. Census Bureau.