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October 18, 2019

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Facebook to settle advertiser lawsuit for $40 million

Facebook

Richard Drew / AP

In this March 29, 2018, file photo, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York’s Times Square.

OAKLAND, Calif. — Facebook has agreed to pay $40 million to advertisers who said it inflated the amount of time its users watched videos.

The San Jose Mercury News says the California-based social media giant denied any wrongdoing in a lawsuit settlement. The settlement notice was filed Friday by the plaintiffs in Oakland federal court.

Advertisers sued Facebook in 2016 over user metrics that supposedly measured the average length of time consumers spent viewing posted video ads. The lawsuit said that the time was inflated by up to 900 percent and that helped convince advertisers to buy Facebook's video advertising services.

Facebook publicly acknowledged an error in the formula. The company denied allegations that its engineers knew about problems for more than a year and did nothing.