Pivot to the Truth? Facebook Lied About Video Stats, Advertisers Say

Mark Zuckerberg

Following a harrowing string of events over the last month, a group of advertisers have filed a complaint accusing Facebook of fraud for knowing about video viewership miscalculation on the platform a year before disclosing that info in 2016.

Previously, the small advertiser had sued over the initial 2016 admission by Facebook, but it has now amended its suit.

Facebook claims that it informed the customers just after the errors were discovered and updated their help center to explain the issue. The advertisers had initially filed an lawsuit in 2016, but Facebook documents released through the court process shined new light on the grievances. This set off several other miscalculations handed by the company leading to a lawsuit. 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. However, the company never bothered to make corrections in order to retain their goodwill.

An advertiser is alleging that Facebook Inc. hid an error in video viewership data shared with brands for more than a year and then vastly understated the issue.

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As part of their case, they have viewed thousands of internal Facebook records and claim these show the company knew about the issue in 2015. 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. Although Facebook claims it was an accident, a lawsuit from marketing agency Crowd Siren alleges that social network had known for quite some time prior and made an effort to hide it. If advertisers were more widely aware of this fact, and in particular, if they knew that their advertisements were among those that were not drawing viewers' attention, they would be less likely to continue buying video advertising from Facebook. By not taking into account shorter views, but still counting them towards the total time watched figure, it may have misled advertisers.

"Facebook's action rises to the level of fraud and may warrant punitive damages", attorneys for for the marketing firms claim in their lawsuit, whose full text is available online.

The two sides will appear before US District Judge Jeffrey White in Oakland on December 14, 2018 at 9am.

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