A group of marketers is suing Facebook alleging ad fraud, after digging through 80,000 pages of internal documents

A group of small advertisers is suing Facebook and claims the social network knew about measurement miscalculations for a year before they were reported.

The group dubs itself LLE One and includes Las Vegas-based social media firm Crowd Siren and Social Media Models as well as defunct startup Quirky. The group filed a lawsuit in California’s federal courts in 2016 and added a complaint Tuesday claiming that internal records suggest "Facebook’s action rises to the level of fraud." The plaintiff's case is based off roughly 80,000 pages of internal records from Facebook.

In response to the lawsuit, a Facebook spokeswoman said, “This lawsuit is without merit and we've filed a motion to dismiss these claims of fraud. 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 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%. The report set off a stream of other metric miscalculations reported by Facebook and changes to how metrics were handled at the social-media company. Facebook also set up a measurement council and began working with the Media Ratings Council to complete an audit of its metrics.

According to the lawsuit, the video metrics were actually inflated by 150% to 900%. The lawsuit also alleges that Facebook knew about the metric disparity in July 2015.

"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.

Marketers claim that Facebook knew about the metric mistakes ahead of time

The lawsuit claims that, in June 2016, a Facebook engineer followed up to a 2015 complaint from advertisers about the average percent of video viewed. The engineer wrote that there “was no progress on the task for a year,” and continued to report the metric for several months while using a “no PR strategy” that avoided drawing attention to the error, according to the suit.

LLE One also alleges that internal documents found that Facebook had never performed a full audit of its video metrics prior to September 2016 and that the video insights team — which was responsible for investigating and fixing errors — only had two engineers dedicated to fixing errors.

A group of marketers is suing Facebook alleging ad fraud, after digging through 80,000 pages of internal documents

Marketers claim that Facebook knew about the metric mistakes ahead of time

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