LinkedIn To Pay $6.625m In Ad Lawsuit Settlement

Microsoft unit LinkedIn has agreed to pay $6.625 million (£5.2m) to settle advertisers’ claims that the company inflated user engagement metrics to overcharge for video advertisements.

Under the deal LinkedIn also agrees to use “commercially reasonable efforts” to engage a “reputable third party” to audit its ad metrics, according to the plaintiffs’ motion for preliminary approval of the agreement in the US District Court for the Northern District of California.

The company also made changes to its agreements with advertisers, the motion said.

The settlement is to go to advertisers who bought ads on the platform from January 2015 to May 2023, which the motion said covers about 300,000 members.

Video ads

The settlement must be approved by US Magistrate Judge Susan van Keulen in San Jose.

Under the deal Sunnyvale, California-based LinkedIn does not acknowledge wrongdoing. The company has denied improper conduct.

In November 2020 firms led by TopDevz of Sacramento and Noirefy of Chicago alleged that LinkedIn had inflated the number of people who watched video ads so it could overcharge hundreds of thousands of advertisers.

The advertisers accused LinkedIn of inflating its metrics by counting video ad “views” from users’ LinkedIn apps, even when videos played only off-screen because users had scrolled past them.

The lawsuit began two weeks after LinkedIn admitted in November 2020 that its engineers had fixed software bugs that may have led to more than 418,000 overcharges, most under $25.

Ad metrics

LinkedIn said it had provided credits to virtually all affected advertisers.

In December 2021 Judge Susan van Keulen dismissed the case with prejudice, saying the plaintiffs failed to show their legal remedies were inadequate before suing under two California laws that offered only equitable relief such as restitution.

She said at the time that LinkedIn had no implied duty to provide “accurate ad metrics”, citing its disclaimer that it was not responsible for click fraud or illicit third-party activity that could affect ad costs.

The advertisers appealed, but the appeal was put on hold while the parties negotiated a settlement.