Senate Commerce Chair Urges Probe of Meta’s Facebook Over Whether It Misled Businesses

“Members of the public and businesses are entitled to know the facts regarding Facebook’s conduct as they make their decisions about using the platform,” Ms. Cantwell wrote.

The letter is another potentially worrisome development for Facebook, which has faced a series of hearings and investigations over allegations of harm caused by its services, and could provide a focus for further probes.

The FTC confirmed that it had received Ms. Cantwell’s letter but declined to comment. Facebook has denied that it has intentionally misled businesses and advertisers.

Ms. Cantwell said the allegations are even more important given Facebook’s large share of the digital advertising space. The company reportedly controlled 74% of the social-media market in July 2020 and now controls 24% of all of U.S. digital-advertising spending, she said.

“Advertisers and publishers, including struggling local news outlets all over the country, may have faced unfair competition by Facebook, impacting their revenues and ability to compete online,” she said in the letter.

Ms. Cantwell’s letter raises two sets of issues. One relates to how Meta, formerly known as Facebook Inc., has represented its success in taking down hate speech that could affect advertisers’ brand safety.

The senator said one of the company’s primary metrics “could significantly misrepresent the effectiveness of Facebook’s algorithms” in taking down hate speech. Her letter cites whistleblower documents showing that Facebook processes “miss more than 90% of hate speech content” despite the company’s claims about its algorithms’ success.

Meta CEO Mark Zuckerberg previously has said he expected the company would use artificial intelligence to detect “the vast majority of problematic content” by the end of 2019, and the company has said that as of earlier this year nearly 98% of the hate speech it takes down was discovered by AI before it was reported by users.

Another set of issues relates to alleged problems with Facebook’s potential reach metric for gauging how many people might see an ad. Ms. Cantwell’s letter repeats longstanding concerns that Facebook might have overstated potential reach.

Ms. Cantwell questioned the head of Meta unit Instagram,

Adam Mosseri,

about those matters at a Senate hearing Wednesday.

“I’m not aware of any specific inaccuracies,” Mr. Mosseri said, adding that the company does its best to ensure advertisers understand what its advertising metrics represent. He said the allegations don’t “line up with any of my experience” in 13 years with the company. Intentionally misleading advertisers “would be a gross violation of trust and it would inevitably come out and undermine our credibility,” he said.

The federal scrutiny follows allegations by whistleblower

Frances Haugen

that the company has ignored or minimized harms caused by its services. Internal documents she provided became the basis of The Wall Street Journal’s Facebook Files series of articles earlier this year.

The FTC already has begun its own investigation into the revelations, and state attorneys general have said separately that they are investigating the company, including its Instagram unit. The revelations also are spurring congressional debate on a range of new legislative proposals that include children’s privacy, accountability, transparency and antitrust measures.

Sen. Cantwell’s letter appears to be based largely on documents Ms. Haugen provided earlier to the Securities and Exchange Commission.

Write to John D. McKinnon at john.mckinnon@wsj.com