Eglet Prince Files Class Action Lawsuit Against Facebook For Inflating Key Advertising Metrics

Eglet Prince has filed a class action lawsuit against Facebook, seeking in excess of $5 million in damages. The suit was filed after Facebook, a leading advertising medium worldwide, admitted for the first time that it used faulty metrics to measure the duration that viewers watched paid advertisements distributed on the social media platform.

In an article published by The Wall Street Journal (Sept. 24-25, 2016), the Journal's Suzanne Vranica and Mike Shields reported that Facebook executives admitted that Facebook did not include views of less than 3 seconds when measuring average viewing time. The Journal reported that Facebook's error "likely overestimated average time spent viewing videos by 60 percent to 80 percent."

"That's like a professional ballplayer getting to discount all of his strikeouts," Eglet said. "On paper, it makes him look like a hero. In reality, it tears apart the integrity of the measurement. It makes it completely worthless. In this case, advertisers were grossly misled about just how much of their advertising dollars were going to waste."

Several firms from around the country were quick to jump on the bandwagon, essentially repeating the claims in Eglet's suit.

Eglet's lawsuit states: "Facebook's wrongful business practices alleged herein constituted a continuing course of unfair competition since, throughout the Class Period, Facebook marketed and sold its advertising products in a manner that offends public policy and/or in a fashion that is immoral, unethical, oppressive, unscrupulous and/or substantially injurious to its customers." The suit seeks general and special damages; punitive damages; attorney fees and litigation costs; and interest.

The idea that one of the world's largest advertising companies grossly misrepresented its impact to advertisers is shocking enough, but what Eglet alleges happened behind the scenes with top Facebook executives is even more damning.

In a parallel lawsuit, Eglet Prince alleges in late 2015, Facebook board members began implementing a plan to liquidate a large amount of their Facebook stock while also maintaining majority voting power via a 3-to-1 stock split. On Sept. 30, 2016, Facebook filed a quarterly earnings statement that did not include any mention of the ad metric miscalculation nor its likely effect on ad revenue — which comprised approximately 97 percent of Facebook's 2016 revenue. On Nov. 3, 2016, Facebook announced it expected a significant decrease in ad revenue and growth in the coming year. Immediately following the announcement, the value of Facebook stock fell approximately $4 billion. Once the truth regarding the ad metrics was revealed to the public, stock prices continued to drop significantly.

The lawsuit also alleges that CEO Mark Zuckerberg sold millions of Facebook shares during this period, COO Sheryl Sandberg sold hundreds of thousands of shares, and other board members sold large numbers of shares.

Anyone who owned common stock in Facebook between April 1, 2015, and November 16, 2016, may be entitled to compensation and/or the right to be appointed as a lead plaintiff. You can contact Eglet Prince at 702-450-5400.

About Eglet Prince

Eglet Prince has successfully represented thousands of clients. The firm is best known for its multimillion-dollar verdicts, including two verdicts in excess of $500 million against a pharmaceutical company. The attorneys at Eglet Prince are experienced trial lawyers and have successfully handled complex litigation, mass tort litigation and class actions. Eglet Prince is located at the Robert T. Eglet Advocacy Center at 400 South 7th Street in downtown Las Vegas, Nevada 89101.

Contact: Robert Adams
Email: [email protected]
Office: (702) 450-5400

SOURCE Eglet Prince