Two Democratic Senators Urge Federal Investigations Into Facebook for Allegedly Misleading Claims

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  • Sens. Elizabeth Warren and Maria Cantwell are urging federal regulators to investigate Facebook over allegations it misled advertisers, investors and the public.
  • Warren, D-Mass., urged the SEC and Justice Department to look into potential wire fraud and securities laws violations.
  • Cantwell, D-Wash., asked the Federal Trade Commission to probe whether Facebook engaged in unfair or deceptive practices.

Democratic Sens. Elizabeth Warren and Maria Cantwell are urging federal regulators to investigate Facebook over allegations the company misled advertisers, investors and the public about public safety and ad reach on its platform.

On Thursday, Warren urged the heads of the Department of Justice and Securities and Exchange Commission to open criminal and civil investigations into Facebook or its executives to determine if they violated U.S. wire fraud and securities laws.

A day earlier, Cantwell, chair of the Senate Commerce Committee, encouraged the Federal Trade Commission to investigate whether Facebook, now called Meta, violated the agency's law against unfair or deceptive business practices. Cantwell's letter was made public on Thursday.

The letters came to light a day after Instagram head Adam Mosseri testified before a Commerce subcommittee about protecting children on the platform. That hearing, and the letters that followed, resulted from disclosures of internal research at Facebook that were leaked by whistleblower and former employee Frances Haugen to the Senate, SEC and journalists.

Haugen's lawyers already filed a whistleblower complaint with the SEC, claiming the company violated securities laws by misleading investors about its grasp on the safety issues on its platform, among other allegations.

Warren's letter points directly to Haugen's disclosures and said they add to evidence that Facebook misled advertising customers and investors about their ad reach. The senator from Massachusetts said that could be a violation of securities laws and would amount to "breathtakingly illegal conduct by one of the world's largest social media companies."

Warren claimed, based on the disclosures, that Facebook failed to notify investors or the SEC about errors in the platform's "Potential Reach" product, which was meant to estimate how many people in an area may see an ad. Warren wrote that evidence increasingly suggests executives were aware the metric "was meaningfully and consistently inflated."

In her letter to the FTC, Cantwell focused on Facebook's claims about the safety of its products, in addition to the allegedly inflated ad projections. The Washington senator pointed to Haugen's disclosures to suggest Facebook's claims of the efficiency of its algorithms in removing hateful content "could significantly misrepresent" their effectiveness. She suggested the agency investigate Facebook and, depending what the evidence shows, pursue monetary relief for advertisers and disgorgement of allegedly ill-gotten gains.

A Facebook spokesperson didn't immediately provide a response to the letters.

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