LinkedIn has agreed to pay $6.625 million to settle a lawsuit alleging it inflated video ad metrics, leading to overcharges for advertisers. The settlement, which requires court approval, also involves hiring an outside auditor to review ad metrics for two years. Learn more about this case and its implications for advertisers.
LinkedIn has reached a settlement agreement in a proposed class action lawsuit, agreeing to pay $6.625 million to resolve allegations that it overcharged advertisers by inflating the number of video ad views on its platform. This settlement was filed on Thursday in federal court in San Jose, California, and is pending approval by U.S. Magistrate Judge Susan van Keulen.
The lawsuit, led by advertisers including TopDevz of Sacramento, California, and Noirefy of Chicago, accuses LinkedIn of manipulating ad metrics by counting video ad “views” from users’ LinkedIn apps, even when the videos played off-screen due to users scrolling past them. Although LinkedIn has denied any wrongdoing, the settlement underscores its commitment to ensuring the integrity of its advertising products.
The origins of this lawsuit date back to November 2020 when LinkedIn disclosed that its engineers had addressed software bugs that could have led to more than 418,000 overcharges, most of which were under $25. Following this revelation, LinkedIn issued credits to nearly all affected advertisers.
Under the terms of the settlement, LinkedIn will make a payment to cover U.S. advertisers who purchased ads on its platform between January 2015 and May 2023. As part of the agreement, LinkedIn has also committed to engaging an outside auditor for two years to review its ad metrics to prevent future discrepancies.
LinkedIn, headquartered in Sunnyvale, California, and owned by Microsoft, has emphasized that this settlement reflects its dedication to maintaining a trustworthy advertising platform. Microsoft, based in Redmond, Washington, reported a profit of $66.1 billion for the nine-month period ending March 31.
The lawsuit was initially dismissed by Judge van Keulen in December 2021. However, the advertisers’ appeal was put on hold to allow both parties to mediate the dispute, leading to this settlement agreement.
The attorneys representing the advertisers may request up to $1,656,250, which represents 25% of the total settlement amount, to cover legal fees.
This case, known as In re LinkedIn Advertising Metrics Litigation, is filed under U.S. District Court, Northern District of California, No. 20-08324.
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