Lawsuit Alleges Facebook Duped Advertisers, Publishers With Inflated Video Stats

Mark Zuckerberg

Lawsuit Alleges Facebook Inflated Video View Statistics to Fool Advertisers The Associated Press 17 Oct 2018

In reality, the company only included those who had viewed a video for three seconds or more when calculating this metric, leaving out everyone who clicked away before three seconds. This calculation tactic inflated the average viewing times by 60-80%, the social network told an ad-buying agency at the time.

"In addition to Facebook knowing about the problem far longer than previously acknowledged, Facebook's records also show that the impact of its miscalculation was much more severe than reported", the filing says. However, the lawsuit claims that the average view times were inflated up to 900 percent.

At the time, Facebook claimed it only discovered the problem "about a month" earlier and had fixed it right away.

A legal-filing brought against the social network by a group of small advertisers contends that Facebook knowingly falsified its average viewership statistics for over a year as a means of duping advertisers into signing up for video ads in the false belief that more members were viewing them than was actually the case. At the time, large swaths of the complaint were blacked out, including the information forming the basis of the fraud allegations.

The marketer added claims of fraud and a request for punitive damages in its amended complaint, which it filed in federal court in Oakland, California. The complaint also alleges that Facebook's errors were more significant than reported in 2016.

"Facebook's internal efforts behind the scenes reflect a company mentality of reckless indifference toward the accuracy of its metrics", the advertisers said in Tuesday's filing. "We told our customers about the error when we discovered it - and updated our help center to explain the issue", a company spokeswoman told the Journal. Facebook claimed it calculated the "average duration of video viewed" by dividing the total time users' spent watching a video by the total number people who watched it.

"This lawsuit is without merit and we've filed a motion to dismiss these claims of fraud". It countered: "Suggestions that we in any way tried to hide this issue from our partners are false", the company said in a statement.

Early past year, Facebook agreed to have the Media Rating Council audit its ad metrics, and it now also shows advertisers independent analysis from third-party measurement firms. Among other sources, the suit drew on a report by industry group Video Advertising Bureau showing that Facebook's audience reach estimates in every U.S. state were higher than the states' actual populations according to the USA census.

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