Six marketers who are suing Facebook over inflated video metrics are urging a federal judge to allow them to proceed with their case.
The marketers, including the bankrupt tech incubator Quirky, argue in new court papers that Facebook's errors resulted in an artificially inflated price for video ads. "Advertisers were led to believe that Facebook’s video advertising performed better -- and was therefore more valuable -- than it really was," they say in papers filed last week with U.S. District Court Judge Thelton Henderson in San Francisco.
The companies' argument comes in response to Facebook's recent request that Henderson dismiss the lawsuit.
The dispute between the advertisers and social networking service stems from revelations last year that Facebook misreported two metrics related to its video ads. The result of both errors was that Facebook inflated the average time spent viewing ad clips by 60% to 80%. The company said last September that its mistaken calculations didn't affect billing. (Last week, Facebook acknowledged that it also overstated the number of times consumers clicked on some mobile ads; the company said it had issued refunds to affected advertisers.)
Quirky and other advertisers allege in a class-action complaint that Facebook violated a California law regarding unfair and fraudulent business acts. Facebook argued last month that the lawsuit should be dismissed on the grounds that the marketers didn't allege enough facts to show that they relied on -- or had ever seen -- the erroneous statistics.
But the marketers countered last week that the judge can reasonably infer that the marketers both saw and relied on the incorrect numbers.
"As plaintiffs alleged, Facebook’s inflated viewership metrics therefore distorted the market for Facebook’s video advertising, artificially increasing the market price that consumers paid and the advertising profits that Facebook pocketed over the past two years," they argue. "Facebook has now corrected its inflated metrics, but it has done nothing to compensate the advertisers who overpaid for Facebook advertising."