LinkedIn has agreed to a $6.625 million settlement to resolve a proposed class action lawsuit that accused the Microsoft-owned unit of overcharging advertisers by inflating the number of views on video ads. The preliminary settlement was filed late Thursday in the federal court in San Jose, California, and is pending approval by U.S. Magistrate Judge Susan van Keulen.
While LinkedIn has denied any wrongdoing, the company has committed to using reasonable efforts over the next two years to hire an external auditor to review its ad metrics. The advertisers, represented by TopDevz of Sacramento, California, and Noirefy of Chicago, alleged that LinkedIn inflated ad metrics by counting video ad “views” from users’ LinkedIn apps even when the videos played only off-screen because users had scrolled past them.
The lawsuit was initiated shortly after LinkedIn disclosed in November 2020 that its engineers had fixed software bugs that may have led to over 418,000 instances of overcharging, most of which were under $25. LinkedIn provided credits to nearly all the affected advertisers.
The settlement covers U.S. advertisers who purchased ads on LinkedIn between January 2015 and May 2023. As part of the settlement, LinkedIn has agreed to employ an outside auditor to ensure the accuracy of its ad metrics, a move intended to restore advertiser confidence.
Neither LinkedIn nor Microsoft immediately responded to requests for comment following the announcement of the settlement.
The class action lawsuit had previously been dismissed by Judge van Keulen in December 2021. However, the advertisers appealed the decision and agreed to put the appeal on hold to engage in mediation. The settlement represents the culmination of these negotiations.
The legal representatives for the advertisers may seek up to 25% of the settlement amount, which totals $1,656,250, to cover legal fees.
The case, known as In re LinkedIn Advertising Metrics Litigation, is filed in the U.S. District Court for the Northern District of California under case number 20-08324.
This settlement marks a significant step in addressing the concerns raised by advertisers about the accuracy of LinkedIn’s ad metrics. The involvement of an independent auditor is expected to enhance transparency and accountability in how ad views are counted on the platform.
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