Facebook knowingly cashed in on exaggerated metrics for video, according to documents from a class action lawsuit, at the same time the company’s increased emphasis on video inspired major news and sports media outlets to pivot coverage strategy to include more video content.
The small group of advertisers behind the lawsuit allege the social media giant misreported and then covered up inflated video metrics that it used to convince its biggest advertisers of its value. In the complaint filed Tuesday, the plaintiffs claim Facebook “either knew that the average viewership metrics it was reporting was false or reported those metrics recklessly and without regard for their truth.”
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Once the discrepancy was found out, the advertisers say Facebook launched a hush campaign.
“Even after Facebook ultimately decided to correct its metrics, it still knowingly disseminated false metrics for several additional months,” the complaint states. “Facebook chose to continue disseminating false metrics for several more months while it developed and deployed a “no PR” strategy designed to “obfuscate the fact that we screwed up the math.” All the while, Facebook continued to reap the benefits from the inflated numbers.”
In September 2016, the Wall Street Journal reported Facebook for two years had been overstating the average time its users spent watching paid video advertisements. Based on information from advertising agencies who had spoken with Facebook, the Journal reported Facebook’s metrics had been overstated by between 60 and 80 percent.
The lawsuit notes that in response to the media attention Facebook admitted it made a mistake, but emphasized that it had only discovered the mistake “about a month ago,” and that “as soon as we discovered [it], we fixed it.”
The plaintiffs say they have no reason to believe Facebook was lying, and limited their claims to contract and statutory claims, which have already been tested and found viable.
Documents filed Tuesday show metric numbers on video views were inflated by anywhere between 150 to 900 percent.
"This lawsuit is without merit and we've filed a motion to dismiss these claims of fraud," a spokesperson for Facebook told the Washington Examiner. "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, like many other social media giants, has cut into the audiences and advertising revenue of mainstream media outlets nationwide, many of which have slashed traditional reporting staffs to provide more of multimedia content — at the time being sold as the platform’s most successful storytelling method.
For example, last year, Fox Sports laid off 20 written-word journalists as they moved to an almost completely video-streamed presentation model.