Facebook accused of misleading advertisers, then trying to hide it

"We told our customers about the error when we discovered it-and updated our help center to explain the issue", a spokeswoman said.

"In an internal response to one such inquiry, a Facebook engineer discussed the numerator/denominator mismatch: 'I remember [another Facebook engineer] mentioned when computing the average, we only consider views greater than three seconds, but use the total watch time (including those under three [seconds]),'" the lawsuit says. They also claimed the error didn't affect billing, though with viewership metrics inflated 150 to 900 percent, it's easy to see how advertisers might have seen the inflated numbers as incentive to buy more ads.

Facebook developed a "no PR" strategy to avoid drawing attention to the error, according to the court filing.

Later, the group of advertisers added a claim of fraud, and in a filing on Tuesday they have now alleged that Facebook knew of the advertising metric bug as early as January 2015 and determined the nature of the miscalculation within months, but failed to disclose this information to advertisers for over a year.

A group of advertisers alleges that Facebook provided misleading statistics about the effectiveness of video ads and may have known the stats were faulty long before they acknowledged the problem, according to a complaint filed in federal court on Tuesday.

Meanwhile, the filing further claims that the problem was more severe than previously reported. However, by discarding shorter video views, the company also arrived at higher average watch times.

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The case stems from September 2016, when a report from The Wall Street Journal found that Facebook had miscalculated the time spent watching videos by 60% to 80%.

Now, those claimants have filed an amended complaint.

In the filing, brought before the United States district court in Oakland the claimants write: "If Facebook had immediately corrected its miscalculation in a straightforward manner, advertisers would have seen a sudden and precipitous drop in their viewership metrics".

Facebook says the lawsuit is "without merit" and that it has asked White to dismiss the fraud claims. Facebook responded in a statement saying: "Suggestions that we in any way tried to hide this issue from our partners are false".

The plaintiffs went on to say that "multiple advertisers had reported aberrant results caused by the miscalculation", but the social network "did nothing" to stop the spread of its incorrect metrics. Among other sources, the suit drew on a report by industry group Video Advertising Bureau showing that Facebook's audience reach estimates in every U.S. state were higher than the states' actual populations according to the USA census.

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