Meta Platforms (META) is facing serious accusations from a former employee who says the tech company misled advertisers and broke Apple’s (AAPL) privacy rules. The employee, Samujjal Purkayastha, claims that Meta exaggerated the success of its “Shops Ads” feature by showing gross sales instead of net sales. According to him, internal investigations revealed that the performance numbers were overstated by 17% to 19%, but Meta didn’t share this with advertisers. These ads, which launched in 2022, allow businesses to sell products through digital storefronts on Facebook and Instagram.
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Purkayastha also alleges that Meta tracked users’ online activity without their permission, even after Apple introduced new privacy measures in 2021 that required explicit consent. He says that Meta secretly connected user data to monitor behavior across websites, thereby violating Apple’s App Tracking Transparency policy. Purkayastha filed these claims with the Central London Employment Tribunal, stating that he was fired in February after raising these concerns. Interestingly, a judge said that his case could have merit, but declined to let him keep his job during the process. A full hearing is expected later.
In addition to the tracking and data inflation claims, Purkayastha says Meta failed to tell advertisers that Shops Ads were heavily subsidized. He claims CEO Mark Zuckerberg approved $160 million for free ad placements during testing, which made results seem better than they were. Meta responded by saying there was no intent to retaliate and that the concerns were normal business issues, not evidence of illegal behavior. The company also said that the subsidies were publicly mentioned and known within Meta.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $872.68 per share implies 18.4% upside potential.
