Lawsuit Alleges Facebook Duped Advertisers, Publishers With Inflated Video Stats

Advertisers allege Facebook hid the fact that no one watches video ads

Facebook accused of misleading advertisers, then trying to hide it

That complaint stemmed from a Wall Street Journal report in September 2016, that revealed Facebook had been overstating the average time its users spent watching paid video advertisements.

However, the group of advertisers suing Facebook now claim that the company knew since January 2015 that it was over-reporting the figures, reported Bloomberg. Furthermore, its activity was described as "likely to deceive" advertisers.

Now, a group of small advertising businesses claims that Facebook knew about the faulty metrics in early 2015, more than a year before its public apology. By not taking into account shorter views, but still counting them towards the total time watched figure, it may have misled advertisers.

A Facebook spokesperson however said the lawsuit was "without merit" and that the company has filed a motion to dismiss the claims of fraud. The plaintiff, Nevada-based marketing agency Crowd Siren, is backing up the allegations with information from internal Facebook records it obtained as part of court proceedings. The complaint goes beyond the obvious misleading, alleging that Facebook actively committed fraud by failing to correct the issue for two years despite knowing of its existence. According to the company, while Facebook executives were insisting that video consumption was growing fast, it was becoming apparent that some of the metrics used to calculate time spent watching video content were incorrect.

The average duration of video views is a key metric for advertisers to assess the market, according to the lawsuit.

Abandoning Facebook for other social media platforms is a conundrum for advertisers, and - given the platform's reach - "playing ball" with Facebook might be the only way through situations like this.

When it eventually disclosed the problem in 2016, Facebook said that average view times were inflated by 60 to 80 percent.

Facebook now has a dedicated metrics team and allows third parties and experts to review its measurements regularly. They allege the company engaged in unfair business conduct by disseminating inaccurate metrics that significantly overestimated the amount of time users were spending watching video ads. Facebook also suggested there was a greater degree of autonomy with Portal, as physically shuttering its cameras would disable the device's most invasive feature.

But Tuesday's filings allege Facebook falsely pumped up statistics by 150 to 900 percent.

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