Class Action Suit Alleges Facebook Plays Favorites with Larger, Higher-Spending Advertisers Versus Smaller Shops

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Three Arkansas businesses have filed a proposed class action against Facebook and its e-commerce arm over their allegedly anticompetitive practice of favoring larger marketers looking to advertise on the embattled social media giant's mobile apps over smaller shops who spend less money with the company.

The plaintiffs behind the case are two Arkansas firearms stores and a shop that sells ammunition and bullet jewelry. Stressing that it's nearly impossible for a business to effectively market itself via social media outside of Facebook's ecosystem spread across apps like Instagram, Messenger and WhatsApp, the plaintiffs argue that Facebook has different sets of rules in place for commercial marketers despite claiming it uniformly enforces its published advertising policies. According to the 41-page complaint, Facebook's lack of uniform enforcement with regard to its advertising policies is "particularly evident as against larger commercial marketers who pay [Facebook] more than the Plaintiffs and Class members" pay. In reality, the plaintiffs aver, Facebook uses smaller marketers to grow its advertising business, and when the company for any reason denies those smaller shops access to its ad networks, "Defendant is favoring larger marketers that pay … more money."

The lawsuit explains that businesses can build their own advertising networks on Facebook's apps by amassing "Likes" and "Followers" on their pages. These networks are valuable for advertising purposes, the suit continues, because they allow marketers, and in turn Facebook, to target groups of people with similar interests. The lawsuit alleges that Facebook, citing purported violations of its advertising policies, blocks marketers from accessing their own content and sells bigger competitors, who pay Facebook more money, access to the smaller marketers' network of followers. 

The plaintiffs allege in no uncertain terms that their advertisements have been blocked by Facebook for no reason other than they spend less money with the company than other businesses. According to the suit, this evidences two different sets of rules in place that are arbitrarily split along the lines of how much money a company spends on Facebook advertising. The less money a marketer spends with Facebook, the plaintiffs claim, they less likely their content will be seen: 

"Defendant blocks the content attempted by the Plaintiffs and the Class members while simultaneously allowing the larger, favored commercial marketer to post the same content. By its conduct Defendant demonstrates that the Facebook Commercial Policies do not apply to the to the [sic] larger commercial marketers; for the Plaintiffs and the Class members, either Defendant (a) capriciously and arbitrarily applies those policies only to them or (b) intentionally holds the larger commercial marketers to a less arduous standard; regardless as to which, the negative effects upon the Plaintiffs and the Class members are the same."

Whether Facebook capriciously or intentionally denies smaller shops exposure for which they paid, the case continues, companies like the plaintiffs have apparently been harmed economically given that Facebook's platform is "an essential advertising medium" upon which businesses have come to rely. More from the complaint: 

"Having no reasonable alternative to doing business with Defendant due to the size and ubiquity of the Facebook Apps, the Plaintiffs and the Class members then become dependent upon the Facebook Apps and completely at risk for the adverse consequences of Defendant's anticompetitive decisions, or whims, to provide or not provide, access by the Plaintiffs and Class members to their respective networks on the Facebook Apps." 

Among the alleged exampled included by the plaintiffs of Facebook's supposedly discriminatory treatment are instances in which the businesses claim the social media platform blocked their ads because they "might lead to the use of firearms." One such ad was for concealed carry permit classes, the suit says, noting Facebook allowed similar postings from larger gun stores.