Facebook Settles Class Action Claiming Company Inflated Video Viewership Metrics

Mark Zuckerberg - F8 Facebook Developer Conference - Getty - H 2018
Justin Sullivan/Getty Images

Several advertising agencies told a California federal court Wednesday that Facebook has agreed to settlement terms to resolve a putative class action alleging that the social media giant wildly overstated the average time its users spent watching paid advertisements.

The amended complaint pointed to a 2016 story in The Wall Street Journal revealing that Facebook’s metrics had been overstated by between 60 and 80 percent. According to the plaintiffs, Facebook admitted its mistake, but actually, the problem was much larger.

"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," stated the complaint. "The average viewership metrics were not inflated by only 60%-80%; they were inflated by some 150 to 900%."

Facebook responded that such calculations  came from selectively used information from internal discussions and documents produced by Facebook during discovery. The Mark Zuckerberg company also argued for dismissal based on the lack of allegation that the ad agencies led by LLE One  actually saw the erroneous metrics and because of those metrics decided to spend more money on Facebook video ads.

In April, after considering amended pleadings, U.S. District Court Judge Jeffrey White allowed claims of fraud and unfair competition to move forward.

Now, however, the parties are requesting a pause on the deadlines in the litigation, including class certification briefing, in light of a settlement that is being memorialized. The deal comes after mediation.

No terms have yet been released, and plaintiff attorney Eric Gibbs says there's no further information he can provide at this time. The proposed settlement will need to be approved by the judge and figures to be presented in court in the next few months.

A Facebook spokesperson said, "This lawsuit is without merit but we believe resolving this case is in the best interests of the company and advertisers."