UPDATED 12:38 EDT / OCTOBER 17 2018

APPS

Amid privacy concerns, lawsuit accuses Facebook of covering up skewed ad data

An advertiser is alleging that Facebook Inc. hid an error in video viewership data shared with brands for more than a year and then vastly understated the issue. 

The complaint, spotted today by Bloomberg, comes as part a suit that was filed after the social network disclosed the error in September 2016. The plaintiff, Nevada-based marketing agency Crowd Siren, is backing up the allegations with information from internal Facebook records it obtained as part of court proceedings.

The complaint makes two main claims. 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. Crowd Siren further alleges that issue was bigger than what the company led brands to believe. 

The original suit, which the Nevada-based firm filed with several other small advertisers, claimed that Facebook overreported the average time users spend viewing videos on its platform. The misrepresentation stemmed from a failure to factor in viewing sessions that lasted less than three seconds. 

When it eventually disclosed the problem in 2016, Facebook said that average view times were inflated by 60 to 80 percent. Now, Crowd Siren claims that the figures were in fact 150 to 900 percent higher than they should have been.

The skewed metrics didn’t cause Facebook to overcharge any marketers for ads. However, Crowd Siren claims that the data made users’ engagement with videos appear stronger than it really was, which in turn could have influenced brands’ spending decisions. The complaint charges that the error amounts to fraud and requests punitive damages.

Facebook dismissed the claims as false in a statement to the press. “This lawsuit is without merit and we’ve filed a motion to dismiss these claims of fraud,” a company spokesperson told CNET. “Suggestions that we in any way tried to hide this issue from our partners are false. We told our customers about the error when we discovered it — and updated our help center to explain the issue.”

The complaint is one of two ongoing lawsuits against Facebook involving advertising data. The other, which was filed in August, accuses the company of overstating the size of the audience brands that can reach via its platform.

These lawsuits come in a time when Facebook is facing heightened scrutiny over its handling of user data. Yesterday, the social network admitted that its recently launched Portal video calling device collects information about app usage and calls, despite earlier claims to the contrary. Facebook is also dealing with the fallout from a recently disclosed breach that saw hackers exploit a software bug to steal data about tens of millions of users.

Image: Facebook

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