Lawsuit Alleges Facebook Duped Advertisers, Publishers With Inflated Video Stats

By Janko Roettgers

LOS ANGELES (Variety.com) – Facebook didn’t tell advertisers and publishers about known problems with its video viewing data, effectively duping them into investing in video ads and products, a new lawsuit filed in California this week alleges.

The lawsuit refers back to a disclosure made in 2016, when it admitted that it inadvertently had been overstating some video viewing metrics . At the time, the company said that it had overestimated the “average duration of video viewed” metric by 60% to 80%.

The lawsuit, which was first reported by the Wall Street Journal , now alleges that Facebook knew about this issue for over a year before disclosing it to partners. The company first discovered irregularities about the way it was calculating viewing time in early 2015, and soon after figured out the nature of the error, the lawsuit alleges.

Facebook denied these allegations. “This lawsuit is without merit and we’ve filed a motion to dismiss these claims of fraud,” a spokesperson told Variety. “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.”

At the core of the dispute are Facebook’s methods to calculate video viewing time. The company long had a policy to not count video views that lasted less than 3 seconds. However, by discarding shorter video views, the company also arrived at higher average watch times. The now-filed lawsuit alleges that this allowed the company to inflate average watch metrics by up to 900%.

News of the lawsuit hit a nerve among media insiders late Wednesday, with some suggesting that Facebook’s inflated metrics may have contributed to publishers firing writers and shifting their investments to video.