LinkedIn settles lawsuit over alleged ad overcharges

LinkedIn, a subsidiary of Microsoft, has agreed to pay $6.625 million to settle a proposed class action lawsuit accusing it of overcharging advertisers by inflating the number of views on video ads. This settlement marks the resolution of claims that LinkedIn misrepresented its ad metrics, leading advertisers to believe their ads were reaching a larger audience than they actually were.

The preliminary settlement was filed late Thursday in a federal court in San Jose, California, and awaits approval from U.S. Magistrate Judge Susan van Keulen. LinkedIn, while denying any wrongdoing, has agreed to the settlement and committed to hiring an external auditor for the next two years to review its ad metrics to ensure accuracy.

The lawsuit was brought forward by advertisers including TopDevz from Sacramento, California, and Noirefy from Chicago. They accused LinkedIn of artificially inflating ad metrics by counting video ad “views” from users’ LinkedIn apps, even when the videos played off-screen as users scrolled past them. This practice allegedly led to significant overcharges for the advertisers involved.

The lawsuit was initiated just two weeks after LinkedIn revealed in November 2020 that its engineers had fixed software bugs that potentially caused over 418,000 instances of overcharges, most of which were under $25. In response to the discovery, LinkedIn provided credits to nearly all affected advertisers.

The settlement covers U.S. advertisers who purchased ads on LinkedIn between January 2015 and May 2023. The agreement is a significant step in addressing the concerns raised by advertisers about the transparency and accuracy of ad metrics on the platform.