Facebook Fraud: 80,000 Pages of Internal Documents Prove Facebook Intentionally Misled Advertisers For Two Years

A group of advertisers have joined forces and filed a lawsuit against the social media giant, alleging that Facebook's actions rise to the level of fraud. Facebook was forced to hand over internal documents that provide evidence to the claims.

It's not just the users that Facebook shows a blatant disregard for, it's also the advertisers. In September of 2016, an investigation by the Wall Street Journal discovered irregularities in the reported metrics regarding user engagement with videos hosted on Facebook. This revelation led to a stream of other advertising disparities, and several third party investigations. Initial reports calculated that Facebook over reported the average time spent watching videos by 60% to 80%, but this figure has been shattered by treasure trove of internal documents Facebook was forced to hand over by a federal judge in California and now stands between 150% and 900%.

The lawsuit was filed by “LLE One” and includes Crowd Siren, a social media & content marketing firm based out of Las Vegas. Also among the members joining the group is the failed startup Quirky, which connected inventors with companies that specialized in their product category. The lawsuit states that not only were the reporting engagement times grossly inflated, Facebook knew about the inflation since at least January of 2015. According to the plaintiffs:

"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]),'"

LLE One contends that the documents reveal that Facebook intentionally disregarded internal reports by their engineering team for over a year, and instituted a “no PR strategy” to avoid scrutiny of their business practices. The internal documents further reveal that Facebook never completed an audit of their video metric platform prior to the report from the Wall Street Journal. Even following the report, Facebook tried to sweep it under the rug with a press statement claiming they were working diligently on the issue but only assigning two engineers to work on correcting the reported imbalance.

“Facebook’s internal efforts behind the scenes reflect a company mentality of reckless indifference toward the accuracy of its metrics,” LLE One claimed in Tuesday’s filing.

LLE One has moved to obtain class-action status, as well as punitive damages, claiming that evidence of clear and willful fraud is evident in the documents obtained through discovery. Facebook decided to “obfuscate the fact that we [Facebook] screwed up the math,” the complaint said, quoting the internal documents. Facebook has expectedly requested that the lawsuit be dismissed, without citing evidence for their claim that this is anything except fraud, presumably on the grounds that it hurts their public image & stock price to be caught red-handed.

The Association of National Advertisers, which represents some of the largest brands including Procter & Gamble, Verizon, and General Electric, has called on Facebook to allow for independent verification of their “new and improved” metric system. Similar requests have been made by other trade groups including Digital Content Next, who represents many big name online publishers.

“Facebook needs to lead with radical marketer and consumer transparency to get past this. We haven’t seen it yet” - Jason Kint, CEO of Digital Content Next


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