Facebook Will Pay $40M Fine for Overstating Video Ad Metrics
A class action lawsuit against Facebook is close to being over, as the social network has agreed to pay a $40 million fine for overstating video watch metrics (although it claims that it did nothing wrong). Video advertisers that purchased ads on the site between February 12, 2015, and September 23, 2016, are eligible to take part.
At the heart of the suit is Facebook's previous method of calculating watch time. The company's policy was to disregard video views under three seconds, but doing so artificially increased two average watch time metrics. Advertisers rely on those figures to gauge video ad performance, and so believed their ads were performing better than they actually were. Metrics were increased by 150 to 900%, accusers say. Facebook changed its metrics in 2016 to include all video views.
"Plaintiffs alleged that the error led them and other advertisers to spend more money advertising on Facebook than they otherwise would have. Plaintiffs also alleged that Facebook knew or should have known of the error long before it ultimately fixed it," the memorandum for the settlement says.
During the litigation, Facebook admitted that it made an error in calculation, but asserted that it had been fixed quickly and didn't impact billing. It didn't offer any refunds, and petitioned the court multiple times to dismiss the suit.
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