Facebook could pay up to $ 40 million (about $ 163 million, in direct conversion) in a deal to finalize a lawsuit in the United States that discuss a fraud in video advertising metrics on the platform. Companies that paid for ads claimed compensation after the social network reportedly inflated watch time by up to 900% between 2015 and 2016.
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The amount to be paid by the company is, among other amounts, a $ 28 million indemnity fund, already agreed between the parties, intended for US advertisers who have purchased advertising space on Facebook. The decision was announced on Monday, and the company controlled by Mark Zuckerberg did not comment on the case.
Facebook owner Mark Zuckerberg during 2018 hearing Photo: Reproduction
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The accusation of fraud came up in September 2016, when a report from the The Wall Street Journal revealed that advertisers were dissatisfied with Facebook and suspected that the video metrics provided by the social network were wrong. Hours later, Revenue Director David Fischer acknowledged the Facebook problem, but downplayed the effects for advertisers by saying that it was just a miscalculation that did not affect the billing or the way media mix models affected it. value their investments in video on Facebook.
Two lawsuits from advertisers claiming compensation from Facebook reached US justice in October 2016. By similarity of content, they were unified into what is called, in US law, class-action lawsuit analogous to Brazilian law, would be procedural related equivalent.
The process centered on Facebook's rule of disregarding views of three seconds or less on the overall video count on the platform. The move seemed, at first glance, a way to prevent an artificial playback volume from impacting video viewing metrics on Facebook. However, it was soon perceived as a strategy to inflate the overall video consumption time on the social network. Advertisers claim they were misled into believing that the time spent by users watching video on the platform was longer than the actual.
In the process, Facebook admitted that viewing time could have been inflated by 60% to 80%, but the authors claimed that the numbers would have been rigged by up to 900%. The social network offered $ 28 million to end the discussion, which the authors agreed to receive. Another $ 12.7 million is claimed as fees and reimbursements by lawyers who have acted on the case over the past three years. A California judge will still judge whether the proposal is sufficient to terminate the action.
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