(Bloomberg) — Meta Platforms Inc. falsely reassured investors that the impacts of privacy tweaks to Apple’s iOS software for iPhones “were manageable,” only to later forecast a $10 billion loss in ad revenue this year because of the changes, according to a proposed class-action lawsuit.

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Meta executives failed to inform shareholders during earnings calls last year that the company’s efforts to offset any financial hit weren’t working, the Plumbers and Steamfitters Local 60 Pension Trust claimed in a securities suit filed in San Francisco federal court on Tuesday.

“Instead of being transparent with investors, defendants painted a false and misleading picture of the mitigation efforts Meta put in place to counteract the changes in iOS and rebuild Meta’s advertising business model,” the trust said in its complaint.

A spokesperson for Meta declined to comment.

Read More: Meta Says Apple’s Privacy Rules Give Google Unfair Advantage

The suit comes as Meta is reeling from changes made last year by Apple, which require app makers to ask users if they consent to being tracked. The privacy change has severely hit Meta’s Facebook business that relies heavily on user data to sell targeted ads. Meta had lashed out at Apple last year for the change and warned investors that it would hurt ad revenue.

But the trust claims that executives only “fully revealed” the “significant headwinds” for Meta’s advertising business after it announced a grim earnings report on Feb. 2 that led to an unprecedented 27% drop in its stock price the next day.

Meta’s “wrongful acts and omissions” led to a “precipitous decline” in its stock that led to significant losses and damages for shareholders, the trust said in its complaint.

Story continues

Snap Inc., Meta’s smaller rival that also leverages user data for advertising, is facing a similar suit by investors that accuses the social media company of downplaying how iOS changes would hurt its ad revenue.

The case is Plumbers and Steamfitters Local 60 Pension Trust v. Meta Platforms Inc., 3:22-cv-01470, U.S. District Court, Northern District of California (San Francisco).

(Adds detail about Snap lawsuit)

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