October 16, 2018

Facebook knew of problems with how it measured viewership of video ads for more than a year before it revealed them in 2016, according to a complaint filed by advertisers.

Advertisers allege that Facebook knew for more than a year about problems measuring viewership of video ads before disclosing the issue.

Facebook Inc. knew of problems in how it measured viewership of video ads on its platform for more than a year before it disclosed them in 2016, according to a complaint filed Tuesday by advertisers.

A group of small advertisers filed a lawsuit in California federal court in 2016, alleging the tech giant engaged in unfair business conduct by disseminating inaccurate metrics that significantly overestimated the amount of time users were spending watching video ads.

The plaintiffs later added a fraud claim, and in Tuesday’s court filing they alleged Facebook knew of irregularities in its video metrics by January 2015 and understood the nature of the miscalculation within a few months, but failed to disclose the information for over a year.

The filing followed the plaintiffs’ review of some 80,000 pages of internal Facebook records that they obtained as part of court proceedings.

The complaint, which cites the internal Facebook documents, also alleges that the scale of the miscalculation was far worse than understood.

“Facebook’s internal efforts behind the scenes reflect a company mentality of reckless indifference toward the accuracy of its metrics,” the plaintiffs said in Tuesday’s filing.

In a statement, a Facebook spokeswoman said, “Suggestions that we in any way tried to hide this issue from our partners are false. We told our customers about the error when we discovered it—and updated our help center to explain the issue.”

Facebook said the lawsuit is without merit and has moved to dismiss the fraud claim.

The plaintiffs in the case include Crowd Siren, a small Las Vegas marketing agency, and Jonathan Murdough, a Pennsylvania resident who purchased Facebook video ads.

The lawsuit, which seeks class-action status and punitive damages, stemmed from a September 2016 Wall Street Journal report that said Facebook had vastly overestimated average viewing time for video ads. Facebook disclosed the issue in a post on its advertiser help center that August.

The complete article can be accessed here.

Cohen Milstein’s Consumer Protection team is Co-Lead Plaintiffs’ Counsel in this case.

The case name is: LLE One, LLC v. Facebook, Case. No.: 4:16-cv-06232-JSW, United States District Court, Northern District of California, Oakland Division