Published: Sat, October 20, 2018
Finance | By Loren Pratt

Facebook accused of misleading advertisers, then trying to hide it

Facebook accused of misleading advertisers, then trying to hide it

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. Furthermore, its activity was described as "likely to deceive" advertisers. The allegation was included in newly public filings in a lawsuit brought by a group of small advertisers in California federal court in 2016, the Wall Street Journal reports. "They also would have seen that they had spent considerable money on past advertising campaigns that were not enjoying anywhere near the average viewership that Facebook had represented". The spokesperson went on to say that the company has filed a motion to dismiss the pending litigation. "We told our customers about the error when we discovered it - and updated our help center to explain the issue", a Facebook spokeswoman said in response to the lawsuit.

The new filing comes on the back of a review of around 80,000 pages of internal Facebook records, obtained as part of the court proceedings, by the plaintiffs.

Facebook admitted it miscalculated the metric for about two years. In 2016, addressing the problem with marketers, Facebook said that the average time was inflated by 60 percent to 80 percent, and it only impacted unpaid posts. "But it didn't-it reflected the total time spent watching a video divided by only the number of "views" of a video (that is, when the video was watched for three or more seconds)".

Yet, are people watching video content on Facebook as much as the company has reported? The first is that Facebook originally discovered there's an issue with the video metrics provided to advertisers in February 2015, yet failed to fix and disclose the problem in a timely matter.

In September 2016, Facebook announced that it noticed the error in August 2016 and had moved quickly to correct it.


But Tuesday's filings allege Facebook falsely pumped up statistics by 150 to 900 percent.

The advertisers are suing Facebook for fraud, alleging that the faulty stats allowed the social media platform to charge higher rates for video advertisements that were thought to be more effective than they actually were.

The social network changed its tune on Portal's data collection partly due to miscommunication, another Facebook employee told Recode: Portal won't run its own advertisements, but data collected on the device could be used to target users with ads in separate Facebook apps.

You've probably noticed a lot more videos popping up in your Facebook feed this past year or so.

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