Marketers who are suing Facebook over allegations of inflated video metrics have amended their complaint to include allegations that the social networking service's statements about metrics may have amounted to fraud.
"Internal records recently produced in this litigation suggest ... that Facebook’s action rises to the level of fraud and may warrant punitive damages," the marketers allege in new court papers filed Friday with U.S. District Court Judge Jeffrey White in Oakland, California.
The new complaint contains large swaths of blacked-out text, making it difficult to determine what specific information forms the basis of the fraud allegations. But in a publicly available passage of the class-action complaint, the marketers refer to Facebook's alleged "longstanding reckless indifference to the metrics’ accuracy."
The court battle stems from revelations that Facebook misreported two metrics related to its video ads. The result of the 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. (This spring, 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.)
Several marketers, including LLE One (which does business as Crowd Siren and Social Media Models), subsequently sued the company. They argued that the misrepresentations led them to believe that Facebook's video ads were more valuable than they actually were, resulting in inflated prices.
"The wide disparity between the actual average viewership and Facebook’s reported metrics should have been corrected immediately," the marketers write in the newly amended complaint. "Facebook either knew that the average viewership metrics it was reporting was false ... or reported those metrics recklessly and without regard for their truth."
They are seeking monetary damages -- including punitive damages -- and an injunction that would force Facebook to hire outside auditors and to "promptly correct any problems or issues detected by these auditors."
Facebook hasn't yet responded to MediaPost's request for comment on the marketers' new allegations, but the company previously said the case "has no merit" and that the company will defend itself "vigorously."