Published: Fri, October 19, 2018
Business | By Tara Barton

Lawsuit Alleges Facebook Duped Advertisers, Publishers With Inflated Video Stats

Lawsuit Alleges Facebook Duped Advertisers, Publishers With Inflated Video Stats

The lawsuit alleges that Facebook deliberately obscured this, because the true numbers indicated that the majority of videos were barely played, indicating that users scrolled past them and thus, lowering the value of video advertising and revenue for Facebook.

The social network revealed in September 2016 that it artificially inflated the metric for two years because it only counted videos as viewed if they had been watched for three or more seconds - failing to taking shorter views into account - and possibly misleading advertisers.

In the amended complaint filed on Tuesday (Oct 16) in a California federal court, the proposed class action case filed by plaintiffs including Crowd Siren added a claim for fraud and punitive damages.

Facebook categorically denies any wrongdoing however and has filed a court motion to dismiss allegations of fraud.

"We told our customers about the error when we discovered it - and updated our help centre to explain the issue", it said in a statement.

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"Suggestions that we in any way tried to hide this issue from our partners are false", a Facebook spokeswoman reportedly said. The plaintiff's case is based off roughly 80,000 pages of internal records from Facebook. The report set off a stream of other metric miscalculations reported by Facebook and changes to how metrics were handled at the social-media company.

The skewed metrics did not relate to paid advertisements, but they could have misled brands into thinking that Facebook (fb) was a livelier video platform than it actually was, and some small advertisers sued the platform following its admission. Facebook also set up a measurement council and began working with the Media Ratings Council to complete an audit of its metrics. The now-filed lawsuit alleges that this allowed the company to inflate average watch metrics by up to 900%.

The lawsuit claims that, in June 2016, a Facebook engineer followed up to a 2015 complaint from advertisers about the average percent of video viewed. "But it didn't-it reflected the total time spent watching a video divided by only the number of "views" of a video (that is, when the video was watched for three or more seconds)".

In the filing, brought before the U.S. district court in Oakland the claimants write: "If Facebook had immediately corrected its miscalculation in a straightforward manner, advertisers would have seen a sudden and precipitous drop in their viewership metrics".

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