Facebook's $40 Million Settlement Over Video Metrics Moves Forward

A federal judge has granted preliminary approval to a class-action settlement requiring Facebook to pay $40 million over allegations that it inflated video metrics by up to 900%.

“The Court will likely be able to approve the proposed settlement as fair, reasonable, and adequate,” U.S. District Court Judge Jeffrey White in Oakland, California wrote in an order issued Wednesday.

If granted final approval, the deal will resolve a legal battle dating to 2016, when marketers alleged that misrepresentations by Facebook resulted in inflated prices for video ads.

The settlement agreement calls for at least $28 million to be distributed pro rata to U.S. advertisers who purchased video ads on a Facebook-owned platform between February 12, 2015 and September 23, 2016.

The allegations stemmed from a 2016 news report that Facebook inflated the average time spent viewing ad clips by 60% to 80%.

Last year, the marketers amended their complaint to allege that Facebook underestimated the impact of its errors, and that average viewership metrics were actually inflated by 150% to 900%.

The company has said its mistaken calculation did not affect billing.

But the marketers who sued -- including LLE One (which does business as Crowd Siren and Social Media Models) -- said the incorrect metrics led them to believe video ads on the platform were more valuable than was actually the case, which resulted in higher prices.

Facebook has said the lawsuit was meritless, but that resolving the dispute was “in the best interests of the company and advertisers."

White noted in his order that the resolution came about after almost three years of litigation, production of almost 500,000 pages of documents and 11 depositions.

Advertisers who want to opt out of the settlement must do so by January 27, 2020. White will address whether to grant the deal final approval at a hearing on March 13, 2020.

Facebook still faces a separate class-action complaint accusing the company of inflating the potential reach of ads.

Next story loading loading..