Iron Tribe Fitness v. Meta Platforms, Inc.

This is a nationwide class action lawsuit brought on behalf of advertisers who purchased online ads on Meta, Inc.’s (“Meta”) Facebook platform, which is pending in the Northern District of California before the Honorable Charles R. Breyer. The action seeks to recover damages from Facebook on behalf of advertisers who were overcharged for their purchases of online advertisements between 2013-2017.

The case arises from Facebook’s alleged promises to price advertisements using an auction system known as a Second-Price Auction. While a winning bidder in a Standard Auction pays the full amount of their bid, a winning bidder in a Second-Price Auction only pays the amount needed to displace the next highest bidder. For example, if two bidders each bid $50 and $100 respectively, the winning bidder will pay $100 in a Standard Auction, but only $51 (or $50.01) in a Second-Price Auction. Second-Price Auctions are therefore favorable to bidders, and are commonly used in online advertising, incentivizing advertisers to place higher bids knowing that they will rarely be charged the full amount.

Although Facebook promised that advertisers would participate in a Second-Price Auction, a coding change caused it to administer what is known as Blended-Price Auction. In this type of auction, the winning bidder’s final price falls somewhere between the value of her winning bid and that of next-highest bid. In the example described above, the winning bidder would pay $100 in a Standard Auction, $51 in a Second-Price Auction, and $75 in a Blended-Price Auction. Because a Blended-Price Auction virtually always yields a higher final price for the winning bidder, advertisers – who thought they were participating in a Second-Price Auction – were overcharged billions of dollars during the class period, from 2013-2017.

Plaintiff Facebook concealed the change, and did not immediately revert to its promised Second-Price Auction. Instead, Facebook implemented a gradual, ‘slow rollout’ of the coding fix to avoid detection, as well as a sudden drop in its advertising revenue. Plaintiff’s complaint alleges that this conduct constitutes a breach of contract, breach of the implied covenant of good faith and fair dealing, and a violation of California’s Unfair Competition Law (“UCL”).

Plaintiff filed its initial complaint on April 11, 2025. Plaintiff filed its first amended complaint on November 3, 2025, which Defendant moved to dismiss on December 18, 2025, and Plaintiff opposed on February 6, 2026. Defendant filed its reply brief on March 10, and a hearing is scheduled before Judge Breyer on April 10.