Meta Accused of Inflating Ecommerce Ad Performance Metrics
A whistleblower complaint alleges that Meta artificially inflated the return on ad spend (ROAS) for its Shops ads product by including shipping fees as revenue, subsidizing bids, and applying undisclosed discounts. The former employee, Samujjal Purkayastha, claims this was done to counteract the impact of Apple's 2021 privacy changes and boost adoption of the fledgling ecommerce ad product. Internal reviews allegedly revealed a 17-19% ROAS inflation due to the inclusion of shipping fees and taxes, a practice not followed by Meta's other ad products or competitors like Google. Purkayastha, who was subsequently terminated, brought these concerns to senior leadership. Meta denies the allegations and is actively defending the lawsuit.