Facebook May Have Overstated the Time Users Spent Watching Video by 900%


Several ad agencies revealed the details of a proposed settlement with Facebook that would end a class action litigation

On Friday, several advertising agencies revealed a proposed settlement were Facebook would pay $40 million to end a class action alleging the social media giant overstated the average time its users spent watching video. Even after agreeing to pay $40 million for settlement, Facebook maintains the suit is "without merit."

The suit accused Facebook of not taking responsibility for the breadth of the problem. "The average viewership metrics were not inflated by only 60%-80%; they were inflated by some 150 to 900%," stated an amended complaint. Faced with claims of violating unfair competition law, breaching contract and committing fraud, Facebook contested advertisers' injuries, questioning whether they really relied on these metrics in deciding to purchase ad time.

The plaintiffs claimed that had they gone to trial, a recovery between $100 to $200 million in damages would have resulted. The judge will decide on approval after examining the fairness of the pact.

Here's the full memorandum in support of the settlement.

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Economics, Finance and Investing