Microsoft’s LinkedIn settles advertisers’ lawsuit over alleged overcharges

LinkedIn agreed to pay $6.625 million to settle a proposed class action accusing the Microsoft (MSFT.O) unit of overcharging advertisers by inflating how many people watched video ads on its platform.

A preliminary settlement was filed late on Thursday in San Jose, California federal court, and requires approval by US Magistrate Judge Susan van Keulen in San Jose, California.

LinkedIn denied wrongdoing. It also agreed to use reasonable efforts for two years to hire an outside auditor to review its ad metrics.

Advertisers led by TopDevz of Sacramento, California and Noirefy of Chicago accused LinkedIn of inflating ad metrics by counting video ad “views” from users’ LinkedIn apps, even when videos played only off-screen because users scrolled past them.

The lawsuit began two weeks after LinkedIn disclosed in November 2020 that its engineers fixed software bugs on the business-focused social media platform that may have led to more than 418,000 overcharges, most under $25.

LinkedIn provided credits to nearly all affected advertisers.

Thursday’s settlement covers US advertisers who bought ads on LinkedIn between January 2015 and May 2023.

In a statement, LinkedIn said the settlement “underscores our commitment to the integrity of our ads products and providing a trusted platform for our members and customers.”

LinkedIn is based in Sunnyvale, California, and Microsoft is based in Redmond, Washington. Microsoft’s profit totaled $66.1 billion in the nine months ending March 31.

Judge van Keulen had dismissed the lawsuit in December 2021. Advertisers appealed, but put the appeal on hold so both sides could mediate the dispute.

The advertisers’ lawyers may seek up to $1,656,250, or 25 per cent of the settlement amount, for legal fees.

The case is In re LinkedIn Advertising Metrics Litigation, US District Court, Northern District of California, No. 20-08324.