Facebook to pay advertisers $40M to settle lawsuit over video stats

Oct. 8 (UPI) -- Social media giant Facebook has agreed to pay $40 million to advertisers to settle a lawsuit that accused the company of inflating metrics for user-watched videos on its platform.

The agreement settles a class-action lawsuit from advertisers who bought Facebook ad space between 2015 and 2016. It said the social network exaggerated the amount of time users spent watching videos, by as much as 900 percent.

"[Advertisers] alleged that the error led them and other advertisers to spend more money advertising on Facebook than they otherwise would have," a court memorandum stated. "[They] also alleged that Facebook knew or should have known of the error long before it ultimately fixed it."

The advertisers said Facebook knew for more than a year its metrics were skewed, but "did nothing to stop its dissemination of false metrics."

Facebook ultimately blamed an error in a metrics formula.

The lawsuit began as two separate suits, which ultimately consolidated with other complaints. Plaintiffs attorneys said they will seek 30 percent of the total amount, $12 million, plus $730,000 in court-related expenses.