Sen. Warren urges the Biden administration to probe Facebook over wire fraud and securities laws

Sen. Elizabeth Warren is calling upon the Biden administration to investigate Facebook for allegedly misleading customers and investors about the reach of its advertisements.

The Democratic senator wrote to Attorney General Merrick and U.S. Securities and Exchange Commission chair Gary Gensler on Thursday urging them to open an investigation to determine if Facebook violated wire fraud and securities laws, the Washington Times reported.

“Facebook is not above the law,” Ms. Warren wrote in the letter. “The company’s executives cannot mislead investors, the SEC, its advertising customers, and the public about a core metric of its business model with impunity if such actions violate federal wire fraud or securities laws. Given the allegations of such misconduct, I urge the DOJ and SEC to immediately commence investigations into Facebook’s representations with respect to Potential Reach and, if you find that the company has in fact violated wire fraud or securities laws, to pursue all available criminal and civil sanctions as appropriate.”

Sen. Warren noted that she understood potential reach as an estimate of how many Facebook users may see a given ad and argued that “evidence has mounted suggesting that high-level executives at Facebook may have known the Potential Reach metric was meaningfully and consistently inflated.”

The letter was sent a day after Instagram CEO Adam Mosseri testified before the Senate about protecting children on the platform. The hearing resulted from disclosures of internal research at Facebook that were leaked by former employee Frances Haugen to the Senate, the SEC and journalists.