Judge Throws Out Claims Against LinkedIn Over Inflated Ad Metrics

A federal judge has dismissed claims by advertisers that sued LinkedIn over allegedly inflated ad metrics.

But the ruling, issued Tuesday by U.S. Magistrate Judge Susan van Keulen in the Northern District of California, allows the advertisers to revise their claims and refile them.

The ruling stems from a lawsuit brought last December by tech company TopDevz and recruiting platform Noirefy, which alleged in a class-action complaint that LinkedIn's erroneous metrics allowed the company to charge inflated prices for ads.

They filed suit shortly after LinkedIn acknowledged in a blog post that it had discovered two “measurement issues” that “may have overreported some Sponsored Content campaign metrics for impression and video views.”

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The company said it discovered the measurement issue in August, and fixed it by November. LinkedIn also said the incorrect metrics potentially affected more than 418,000 customers, promised to credit the accounts of any advertisers that were affected.

But the advertisers suing the company say the inflated ad metrics led them to purchase more ads, and pay higher prices for them.

The advertisers raised a host of claims, including that LinkedIn violated a consumer protection law, as well as standards governing contracts. 

LinkedIn urged van Keulen to dismiss the lawsuit at an early stage, arguing that the advertisers and their lawyers had sensed “an opportunity for a windfall.”

“LinkedIn immediately took steps to correct the errors, notify advertisers, and issue makegoods to all potentially affected advertisers that in most instances exceeded the amount of any possible overcharge,” the company said in papers filed in April with the judge.

LinkedIn also argued that the allegations in the complaint -- even if proven true -- wouldn't show that it violated California's consumer protection law, or the other claims in the complaint.

The judge agreed with LinkedIn that the complaint's allegations were lacking.

For instance, she said California's consumer protection law is aimed at safeguarding consumers or small businesses, but the complaint by TopDevz and the other advertisers doesn't include facts showing that they're “small and unsophisticated” entities.

The ruling allows the advertisers to beef up their complaint by adding the kinds of allegations that would show they're entitled to sue under the state's consumer protection law.

She also said the complaint doesn't contain enough specific facts to support the advertisers' other claims, including the claim that LinkedIn violated contractual standards by “fraudulently” concealing or misrepresenting ad metrics.

“Plaintiffs do not identify the substance of any particular representation or when and by whom it was made. Accordingly, the particular circumstances concerning the alleged fraud and misrepresentation cannot be discerned, and thus the fraud-based claims are subject to dismissal,” she wrote.

She gave the advertisers until August 17 to file an amended complaint.

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