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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

Eric H. Gibbs (SBN 178658) 

Dylan Hughes (SBN 209113) 

Aaron Blumenthal (SBN 310605) 

GIBBS LAW GROUP LLP 

505 14th Street, Suite 1110 

Oakland, CA 94612 

Telephone: (510) 350-9700 

Facsimile: (510) 350-9701 

ehg@classlawgroup.com 

dsh@classlawgroup.com 

ab@classlawgroup.com 

Andrew N. Friedman (pro hac vice forthcoming) 

Geoffrey Graber (SBN 211547) 

Eric Kafka (pro hac vice forthcoming) 

COHEN MILSTEIN SELLERS & TOLL PLLC 

1100 New York Ave. NW, Fifth Floor 

Washington, DC 20005 

Telephone: (202) 408-4600 

Facsimile: (202) 408-4699 

afriedman@cohenmilstein.com 

ggraber@cohenmilstein.com 

ekafka@cohenmilstein.com 

[Additional counsel on signature page] 

Counsel for Plaintiffs and Proposed Class 

UNITED STATES DISTRICT COURT FOR THE 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

QUIRKY, INC., and WINK, INC. n/k/a 

Wink Dissolution Corp., on behalf of 

themselves and all others similarly situated, 

Plaintiffs, 

v. 

FACEBOOK, INC., 

Defendant. 

 Case No.: 3:17-cv-00233-EDL 

FIRST AMENDED CLASS ACTION 

COMPLAINT 

DEMAND FOR JURY TRIAL 

Related case: 

 

Latizia v. Facebook, Inc., 3:16-cv-06232-TEH 

Case 4:17-cv-00233-JSW Document 16 Filed 02/02/17 Page 1 of 19
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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

Plaintiffs Quirky, Inc. and Wink, Inc. n/k/a Wink Dissolution Corp., on behalf of themselves 

and all others similarly situated, hereby file suit against Facebook, Inc. and allege the following: 

INTRODUCTION 

1. Facebook, Inc. (“Facebook”) sells video advertising services. When Facebook sells 

these services, Facebooks sells a package of both video advertisements for its website and metrics 

that enable purchasers to monitor their video advertisements’ performance. 

2. This case concerns two of the metrics, the “Average Duration of Video Viewed” and 

the “Average Percentage of Video Viewed.” Because of what it now calls a “miscalculation,” 

Facebook dramatically inflated both metrics by an estimated 60 to 80%. Consequently, Plaintiffs 

and putative class members purchased more video advertisements and paid a higher price for video 

advertisements than they otherwise would have. Plaintiffs and putative class members accordingly 

seek compensation and injunctive relief for violations of California’s Unfair Competition Law, 

breach of Facebook’s implied duty to perform with reasonable care, and unjust enrichment. 

JURISDICTION

3. This Court has subject matter jurisdiction over this action under 28 U.S.C. § 

1332(d)(2) because this is a class action wherein the amount in controversy exceeds the sum or value 

of $5,000,000, exclusive of interest and costs, there are more than 100 members in the proposed 

class, and at least one member of the class of Plaintiffs is a citizen of a state different from a 

Defendant. 

4. This Court has personal jurisdiction over Defendant Facebook, Inc. because 

Facebook, Inc. is headquartered in California, and conducts business in the state of California. 

5. Venue is proper in this Court pursuant to 28 U.S.C. §1391(b) because a substantial 

part of the events or omissions giving rise to the claims occurred in, were directed to, and/or 

emanated from this District. Venue is also proper because Facebook’s terms of service require that 

claims are resolved “exclusively in the U.S. District Court for the Northern District of California or a 

state court located in San Mateo County....”1

 

1

 Facebook, Statement of Rights and Responsibilities, https://www.facebook.com/terms (last 

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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

PARTIES 

6. Quirky, Inc. was a community-led invention platform. Quirky raised about $200 

million from investors, had a partnership with General Electric, and sold its products through a 

variety of retail channels, such as Target, Walgreens, and the Museum of Modern Art. Wink, Inc., 

n/k/a Wink Dissolution Corp. is a wholly-owned subsidiary of Quirky, Inc. Wink developed a 

platform for wireless-enabled products that allowed consumers to control household appliances and 

services through their connected devices and the internet. Through partnerships with General 

Electric, Honeywell, Nest, Phillips and others, over 60 Wink-enabled products were available in the 

marketplace. Wink enabled homeowners to wirelessly connect their lighting, power, and security 

systems through a single application. Quirky and Wink (collectively, “Quirky,” or “Plaintiffs”) filed 

for bankruptcy in September 2015. During the relevant time period, Plaintiffs were incorporated in 

Delaware and their principle place of business was New York. Therefore, Plaintiffs are citizens of 

both New York and Delaware. Between May 4, 2014 and September 23, 2016, Plaintiffs purchased 

video advertising services from Facebook. 

7. Defendant Facebook, Inc. is incorporated in Delaware, and its principal place of 

business is 1 Hacker Way, Menlo Park, CA 94025. Facebook is, therefore, a citizen of both 

Delaware and California. 

FACTUAL ALLEGATIONS 

8. Facebook is a Fortune 500 company that operates social media services, including the 

www.facebook.com and www.instagram.com websites and the WhatsApp Messenger application. 

9. Facebook.com has 1.79 billion monthly active users.2 Users do not pay Facebook to 

create a facebook.com account. Once a user opens a Facebook account, the account holder can, at no 

cost, create a profile page, post content (such as photographs, videos, and links to articles), make 

friends with other users, and view content posted by other users. 

10. Instead of charging account holders to access facebook.com, Facebook makes money 

 

accessed: Jan. 9, 2017). 

2

 Facebook, Company Info, http://newsroom.fb.com/company-info/ (last accessed: Jan. 9, 2017). 

Case 4:17-cv-00233-JSW Document 16 Filed 02/02/17 Page 3 of 19
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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

by selling advertising services. Facebook earns most of its revenue from advertising. For example, in 

2015, Facebook’s advertising revenue was over $17.0 billion, more than 95% of its overall revenue.3

11. One type of advertising service Facebook sells is video advertisements, where 

advertisers can pay money to have video displayed to Facebook users. “Facebook videos (including 

video ad products) autoplay by default . . . though the audio remains off unless users actively turn it 

on.”4 Facebook allows users to scroll past autoplaying videos (including video advertisements) 

without ever turning on the sound or watching more than a few seconds of the video. 

12. As part of Facebook’s video advertising services, advertisers can choose to purchase 

advertisements with specific objectives, including maximizing “Brand awareness,” “Video views,” 

or “Conversions.” Facebook says that a “Brand awareness” campaign will “[i]ncrease awareness for 

your brand,” whereas a “Video views” campaign will “[g]et more people to view your video 

content,” and a “Conversions” campaign will “[d]rive valuable actions on your website or app.” 

13. Facebook video advertising services include marketing analytics, which enable 

purchasers to monitor and evaluate their video advertisements’ performance. Marketing analytics 

refers to the practice of measuring and analyzing the performance of an advertising or marketing 

campaign using data from a variety of metrics. One of the main selling points of online advertising is 

that it offers more detailed and closer to real time marketing analytics than traditional media (such as 

television or radio), and online advertisement sellers such as Facebook have promoted their 

marketing analytics as a prime reason that advertisers should purchase advertisements on their 

platforms.5

 Online advertisers do so because advertisers use analytics to determine where to spend 

advertising dollars and the effectiveness of the dollars spent. As an article in the Harvard Business 

Review explains, analytics allows companies to make informed decisions about how to allocate their 

limited marketing budgets across different mediums (such as television, YouTube, or Facebook), to 

 

3

 Facebook, Inc., Annual Report (Form 10-K) at 42 (Jan. 28, 2016). 

4

 Eric Blattberg, Like it or not, autoplay video won (Apr. 21, 2015), 

http://digiday.com/publishers/autoplay-video-beat-regular-video-sorry-guys/. 

5 See, e.g., Yahoo, Yahoo! Gemini, https://gemini.yahoo.com/advertiser/home (“Measure the impact

of your campaigns and drive better results by accessing actionable insights . . .”). 

Case 4:17-cv-00233-JSW Document 16 Filed 02/02/17 Page 4 of 19
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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

determine which advertising campaigns to “expand” and which to “kill,” and to “readily adjust or 

allocate advertising in different markets on a monthly, weekly, or daily basis—and, online, even 

from one fraction of a second to the next.”6 Accordingly, it has become a standard practice in the 

industry for online advertisers like Facebook to include marketing analytics as part of their 

advertising services, and online advertising purchasers expect that any advertising they purchase will 

indeed include marketing analytics to evaluate the advertising’s performance. 

14. The importance of analytics is apparent in the competitive online video advertising 

market. YouTube, LinkedIn, Twitter, and Facebook all have online video advertising offerings and 

all emphasize the value of their analytics platforms. When Facebook was first entering the online 

video advertising space, it knew that its analytics would be the key to its success. A November 2013 

private presentation Facebook gave to its advertising partners (“November 2013 Presentation”) 

provided talking points on how to convince potential customers to purchase Facebook video 

advertisements instead of other video advertisements, such as YouTube advertisements or television 

advertisements. The presentation acknowledged that one of the weaknesses of Facebook’s video 

advertising platform was the relatively basic level of metrics it provided to video purchasers. The 

presentation stated, “Currently, we only report on video plays, which is a weakness compared to 

YouTube, which reports on video views, completed views, and average duration of view. We are 

working on building out our video insights to give advertisers a better sense for how videos are 

performing. New video insights target launch: Q1 2014.”7

15. In May 2014, Facebook began providing video advertising purchasers with more 

analytics, including video views, completed views, and average duration of view, as part of 

Facebook’s video advertising services. Facebook told its users that the purpose of the new analytics 

was to help video advertising purchasers “learn what’s resonating with people and determine how to 

more effectively create and promote your videos on Facebook.”8 Facebook said its Audience 

 

6 Id. 

7

 Josh Constine, Leaked Facebook Video Ad Pitch Deck Reveals Plans To Steal TV and YouTube 

Dollars, TechCrunch (Dec. 13, 2013), https://techcrunch.com/2013/12/13/facebook-vs-tv-andyoutube. 

8

 Facebook, Introducing Video Metrics (May 5, 2014), 

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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

Retention analytics in particular, such as Average Duration of Video Viewed, would assist video 

advertising purchasers in identifying underperforming videos and finding “the precise moment when 

most people lost interest and stopped watching.”9 Facebook knew and acknowledged that “having 

access to reliable metrics is important to the millions of partners who use our services to grow their 

businesses.” 

16. “Average Duration of Video Viewed,” which is the average amount of time that users 

watched a video, is one of the most important analytics used in evaluating video advertisements’ 

performance. Average Duration of Video Viewed is a measure of “retention,” which advertisers 

care about because the longer people watch an advertisement, the greater the advertisement’s impact 

on the viewer.10 One study of video advertising campaigns on Facebook found that increasing 

retention of a viewer from the 3-second mark to the 10-second mark in a video resulted in a 57 

percent increase in ad recall, a 103 percent increase in brand awareness, and a 64 percent increase in 

“purchase intent” (the intent to the purchase the advertised product).11 And because advertisers place 

higher value upon video advertisements that are viewed for longer periods, they are willing to pay 

more for such advertisements. 

17. After Facebook announced and released its new video analytics platform in May 

2014, Quirky and putative class members purchased video advertising services from Facebook with 

the understanding that video advertising analytics were included in the purchased advertising 

services. 

18. Upon introducing the new video metrics in their analytics platform, Facebook didn’t 

disclose that its new video metrics were not audited or accredited by the Media Rating Council, the 

marketing industry’s standard-bearer for accurate measurements.

19. As acknowledged by Facebook in its private November 2013 Presentation and public 

 

https://www.facebook.com/business/news/Coming-Soon-Video-Metrics. 

9 Id. 

10 Facebook Business, The Value of Video for Brands (Mar. 17, 2015), 

https://www.facebook.com/business/news/value-of-video. 

11 Id. 

Case 4:17-cv-00233-JSW Document 16 Filed 02/02/17 Page 6 of 19
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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

statements, Facebook created and disseminated the new video analytics platform and its video 

metrics to induce users to purchase Facebook’s video advertising services. 

20. Among the new video metrics provided by Facebook were “Average Duration of 

Video Viewed” and the “Average Percentage of Video Viewed.” Below is example of how these 

video advertising metrics would appear on a user’s screen: 

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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

21. Facebook told advertising purchasers that the “Average Duration of Video Viewed” 

was the “total time spent watching a video divided by the total number of people who have played 

the video”12 (as a reasonable advertising purchaser would expect). Figure 1, below, depicts how 

Facebook defined “Average Duration of Video Viewed.”

Figure 1: Formula for Facebook’s “Definition” of “Average Duration of Video Viewed” 

 

22. In August 2016, Facebook disclosed in a post in its “Advertising Help Center” that its 

“Average Duration of Video Viewed” and “Average Percentage of Video Viewed” metrics had been 

improperly calculated. Facebook admitted that it had erroneously “*calculated* the Average 

Duration of Video Viewed as ‘the total time spent watching a video divided by *only* the number of 

people who have viewed a video for three or more seconds’”13 The “Average % of Video Viewed” 

was also erroneous because Facebook calculated that metric by using the “Average Duration of 

Video Viewed” as a calculation input. Figure 2 below, depicts how Facebook erroneously calculated 

“Average Duration of Video Viewed.”14

Figure 2: Formula for How Facebook Actually Calculated “Average Duration of Video 

Viewed” from May 2014 to September 2016 

23. On or about September 23, 2016, David Fischer, Facebook’s vice president of 

business and marketing partnerships, admitted that, due to Facebook’s miscalculation, Facebook had 

 

12 Facebook, How Is the “Average Duration of Video Viewed” Calculated?, 

https://www.facebook.com/business/help/community/question/?id=10104227902985423 (late 

accessed: Jan. 9, 2017). 

13 Id.

14 Id.

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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

misrepresented its “Average Duration of Video Viewed” metric. He wrote that the “average duration 

of video viewed ... metric should have reflected the total time spent watching a video divided by the 

total number of people who played the video. But it didn’t – it reflected the total time spent watching 

a video divided by only the number of ‘views’ of a video (that is, when the video was watched for 

three or more seconds). And so the miscalculation overstated this metric.” 15

24. Facebook’s “Average Duration of Video Viewed” metric was inflated because when 

calculating the average, Facebook included the total time spent by under-3-second viewers in 

watching the video in the numerator of the fraction, but excluded these under-3-second views from 

the denominator of the fraction. Thus, Facebook’s “Average Duration of Video Viewed” metric 

failed to align its criteria for eligible viewing time (the numerator) and its criteria for an eligible 

view (the denominator). 

25. The impact of the numerator-denominator mismatch can be seen through the 

following illustration.

Figure 3: Example - How Duration Metric Should Have Been Calculated, According to 

Facebook’s Definition, For Video Viewed By Four Users for 1, 2, 4, and 9 seconds respectively. 

Figure 4: Example - How Duration Metric Was Actually Calculated, From May 2014 to 

September 2016, For Video Viewed By Four Users for 1, 2, 4, and 9 seconds respectively. 

26. Figure 3 demonstrates how Facebook should have measured average duration of 

video viewed according to its definition. By using the correct method, all four viewers are included 

in the denominator, yielding an average duration of video viewed of 4 seconds in this hypothetical. 

Figure 4 demonstrates what Facebook actually did by excluding the video-watches under 3 seconds 

 

15 David Fischer, Facebook Video Metrics Update, Facebook.com (Sept. 23, 2016)

https://www.facebook.com/business/news/facebook-video-metrics-update. 

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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

from the denominator. In this hypothetical, 2 of the 4 video-watches are dropped from the 

denominator, causing the average duration of video viewed to incorrectly rise to 8 seconds. 

27. By including the time spent watching the videos by users who viewed the videos for 

less than 3 seconds, while excluding those “under 3-second” users from the denominator, the 

Average Duration of Video Viewed metric not only failed to reflect its stated definition, it also 

created a highly misleading result that favored Facebook.

28. Facebook informed some its advertisers that it inflated the “Average Duration of 

Video Viewed” by between 60 and 80%.16 The inflated metric thus made video advertisements 

appear as if they were performing much better on Facebook than they actually were. 

29. The 60 to 80% inflation in the “Average Duration of Video Viewed” metric reveals 

that many users watch Facebook videos advertisements for less than 3 seconds. When users scroll 

right past muted video advertisements, the users have, under Facebook’s reported metric for 

“Average Duration of Video Viewed,” technically spent time watching the video advertisement.

Thus, many of the 1-2 second video-watches (that contributed to the numerator, but not the 

denominator, of Average Duration of Video Viewed) reflect users quickly scrolling past muted autoplaying video advertisements.

30. Video advertising purchasers, including Quirky, viewed the “Average Duration of 

Video Viewed” and “Average % of Video Viewed” as important metrics because users are more 

likely to remember a video advertisement and be affected by it if they watch a longer portion of the 

advertisement. 

31. Facebook’s misrepresentations induced video advertising purchasers, including 

Quirky, to purchase video advertisements because purchasers wanted accurate video advertising 

metrics regarding “Average Duration of Video Viewed” and “Average % of Video Viewed” so that 

they could monitor their video advertisements’ performance. 

32. Facebook’s misrepresentations induced video advertising purchasers, including 

 

16 Suzanne Vranica and Jack Marshall, Facebook Overestimated Key Video Metric for Two Years, 

Wall Street Journal (Sept. 22, 2016, 7:29 PM), http://www.wsj.com/articles/facebook-overestimatedkey-video-metric-for-two-years-1474586951 

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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

Quirky, to continue purchasing video advertisements, and to purchase additional video 

advertisements, because purchasers believed that users were watching their videos, on average, for 

longer than users were actually watching their videos. 

33. Facebook’s misrepresentations induced video advertising purchasers, including 

Quirky, to pay more for Facebook video advertising than they otherwise would have been willing to 

pay. 

34. Facebook’s misrepresentations thereby distorted the market price for its video 

advertising by artificially increasing the price of Facebook video advertising, causing video 

advertising purchasers, including Quirky, to pay more than they otherwise would have paid. 

35. Facebook’s misrepresentations provided Facebook with an unfair competitive 

advantage over other online video advertising platforms, such as YouTube, LinkedIn, and Twitter. 

36. Facebook’s misrepresentations interfered with Quirky and other putative class 

members’ attempts to utilize Facebook’s video advertising analytics, and to run effective video 

advertising campaigns. 

CLASS ALLEGATIONS 

37. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained 

above. 

38. Pursuant to the Federal Rule of Civil P. 23(b)(3), Plaintiffs assert claims on behalf of 

the following “Class”: All persons or entities who, from May 4, 2014 to September 23, 2016 (“Class 

Period”), had an account with Facebook, Inc. and who paid for placement of video advertisements 

on a Facebook-owned website. Excluded from the Class are Defendant, any entity in which 

Defendant has a controlling interest, and Defendant’s officers, directors, legal representatives, 

successors, subsidiaries, and assigns. Also excluded from the Class is any judge, justice, or judicial 

officer presiding over this matter and the members of their immediate families and judicial staff. 

39. This action has been brought and may properly be maintained as a class action as it 

satisfies the numerosity, commonality, typicality, adequacy, and superiority requirements of Rule 

23(b)(3). Plaintiffs seek to represent an ascertainable Class, as determining inclusion in the class can 

be done through Facebook’s own records. 

Case 4:17-cv-00233-JSW Document 16 Filed 02/02/17 Page 11 of 19
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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

40. Plaintiffs reserve the right to amend the Class definition if discovery and further 

investigation reveal that the Class should be expanded, divided into subclasses, or modified in any 

other way. 

41. Although the precise number of Class members is unknown and can only be 

determined through appropriate discovery, Plaintiffs believe, and on that basis allege, that the 

proposed Class is so numerous that joinder of all members would be impracticable as Facebook sells 

millions of advertisements annually, and a significant portion of those advertisements are video 

advertisements. 

42. Questions of law and fact common to the putative Class exist that predominate over 

questions affecting only individual members, including inter alia: 

a. Whether Facebook made material misrepresentations about its video advertising 

services, including misrepresenting the “Average Duration of Video Viewed” and 

“Average % of Video Viewed” metrics; 

b. Whether Facebook’s use of inaccurate, unaudited, and unverified video metrics was 

likely to deceive members of the public and thus constituted a fraudulent business 

practice under California’s Unfair Competition Law (Cal. Bus. & Prof. Code § 

17200); 

c. Whether Facebook’s failure to properly audit and verify its video metrics was 

unethical, unscrupulous, or substantially injurious to video advertising purchasers and 

thus constituted an unfair business practice under California’s Unfair Competition 

Law; 

d. Whether Facebook breached its contractual duty to perform competently and with 

reasonable care by reporting erroneous video metrics; 

e. Whether and in what amount Facebook acquired money by means of its 

dissemination of inflated and improperly verified video metrics; and 

f. Whether it would be equitable for Facebook to profit from its inaccurate reporting of 

video metrics. 

43. Plaintiffs are members of the putative Class. The claims asserted by the Plaintiffs in 

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Case No. 3:17-cv-00233-EDL 

this action are typical of the claims of the members of the putative Class, as the claims arise from the 

same course of conduct by the Defendant and the relief sought is common. 

44. Plaintiffs will fairly and adequately represent and protect the interests of the members 

of the putative Class, as their interests are coincident with, not antagonistic to, the other members of 

the Class. 

45. Plaintiffs have retained counsel competent and experienced in both consumer 

protection and class action litigation. Plaintiffs’ counsel specifically has experience litigating some 

of the largest and most complex consumer class actions, including numerous consumer class actions 

in the Northern District of California. 

46. Certification of the Class is appropriate pursuant to Fed. R. C. P. 23(b)(3) because 

questions of law or fact common to the respective members of the Class predominate over questions 

of law or fact affecting only individual members. This predominance makes class litigation superior 

to any other method available for the fair and efficient adjudication of these claims including 

consistency of adjudications. Absent a class action it would be highly unlikely that the members of 

the Class would be able to protect their own interests because the cost of litigation through 

individual lawsuits might exceed the expected recovery. 

47. A class action is a superior method for the adjudication of the controversy in that it 

will permit a large number of claims to be resolved in a single forum simultaneously, efficiently, and 

without the unnecessary hardship that would result from the prosecution of numerous individual 

actions and the duplication of discovery, effort, expense, and the burden of the courts that individual 

actions would create. 

48. The benefits of proceeding as a class action, including providing a method for 

obtaining redress for claims that would not be practical to pursue individually, outweigh any 

difficulties that might be argued with regard to the management of the class action. 

// 

// 

// 

// 

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FIRST AMENDED CLASS ACTION COMPLAINT 

Case No. 3:17-cv-00233-EDL 

FIRST CAUSE OF ACTION 

(On behalf of the Class)17

CALIFORNIA UNFAIR COMPETITION LAW, 

CAL. BUS. & PROF. CODE § 17200, et seq. 

49. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained 

above. 

50. Facebook violated California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. 

Code §17200 et seq., by engaging in the fraudulent and unfair business acts and practices alleged 

previously, and as further specified below. 

51. Facebook’s dissemination of inaccurate and inflated video-advertising metrics 

constitutes a fraudulent practice under the UCL, as it is likely to deceive Class members into 

believing that their video advertisements were viewed, on an average, for a longer duration than they 

actually were viewed. 

52. Facebook’s failure to properly audit and verify the accuracy of its video-advertising 

metrics before disseminating them to Class members is unethical, unscrupulous, and substantially 

injurious to video-advertising purchasers, and thus constitutes an unfair practice under the UCL. 

Facebook’s practice was also contrary to legislatively declared and public policies that seek to 

protect consumers from misleading statements, as reflected by laws like the Federal Trade 

Commission Act (15 U.S.C. § 45), Consumers Legal Remedies Act (Cal. Civ. Code § 1750 et seq.), 

and California False Advertising Law (Cal Bus. & Prof. Code § 17500). The harm these practices 

caused to Plaintiffs and the Class members outweigh their utility, if any. 

53. Facebook should have known that its metrics for “Average Duration of Video 

Viewed” and “Average % of Video Viewed” were inaccurate and inflated, and had Facebook 

properly audited and verified its video-advertising metrics it would have known that those metrics 

were inaccurate and inflated. The calculation errors that Facebook allowed to persist for over two 

years were obvious errors that would have been discovered by a reasonable auditing and verification 

 

17 Pursuant to Facebook’s terms of service, the laws of the State of California govern “any claim” 

that arises between Facebook and its users, “without regard to conflict of law provisions.” Facebook, 

Statement of Rights and Responsibilities, https://www.facebook.com/terms (last accessed: Jan. 9, 

2017). 

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process. 

54. Facebook’s failure to employ reasonable auditing and verification procedures gave it 

an unfair competitive advantage, as it allowed Facebook to provide video-advertising services at a 

lower cost and made those advertising services appear to be more effective than they were. 

55. Plaintiffs have standing to bring these claims under the UCL because they were 

injured and lost money or property, including but not limited to money paid for Facebook video 

advertisements, as a result of Facebook’s fraudulent and unfair business practices. Among other 

things, Plaintiffs would not have bought as much video-advertising services if Facebook had not 

disseminated inflated metrics and would have paid a lower price for the video-advertising services 

they did purchase. 

56. Pursuant to Cal. Bus. & Prof. Code § 17203, Plaintiffs seek equitable relief to prevent 

the continued use of Facebook’s unfair and fraudulent practices and to restore to the Class all money 

Facebook may have acquired by means of its fraudulent and unfair business practices. 

SECOND CAUSE OF ACTION 

(On behalf of the Class) 

BREACH OF IMPLIED DUTY TO PERFORM WITH REASONABLE CARE 

57. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained 

above. 

58. Plaintiffs and Class members contracted with Facebook to provide them with videoadvertising services. They did so through one or more of Facebook’s advertising interfaces, where 

Class members can submit video advertisements for approval, set a daily advertising budget that can 

be adjusted at any time, set or adjust their target audience, and set or adjust the placement of the 

advertising. 

59. Plaintiffs and Class members met all or substantially all of their contractual 

obligations, including submitting its advertising for Facebook’s approval and paying for Facebook’s 

advertising services. 

60. There is not one integrated contract that spells out Facebook’s obligations to the 

Class, but those obligations can be determined by reference to Facebook’s course of dealing with the 

Class, industry practice, and from various webpages created by Facebook, including Facebook’s 

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Statement of Rights and Responsibilities (https://www.facebook.com/legal/terms); Facebook’s SelfServe Ad Terms (https://www.facebook.com/legal/self_service_ads_terms); Facebooks Advertising 

Guidelines (https://www.facebook.com/policies/ads); Facebook’s Advertiser Help Center 

(https://www.facebook.com/business/help); Facebook’s Community Payments Terms 

(https://www.facebook.com/payments_terms); and Facebook’s ad-creation, editing, and management 

interfaces, which may be accessed through Facebook’s Ads Manager 

(https://www.facebook.com/ads/manager/creation/), Facebook’s Power Editor 

(https://www.facebook.com/ads/manage/powereditor), Facebook’s Ads Manager App, Facebook 

Pages, and Facebook Ads API. 

61. One of Facebook’s obligations is to provide Class Members with an advertising 

interface: a central portal where Class Members can create, edit, and monitor advertisements for 

placement on Facebook’s websites. This obligation is implied by Facebook’s course of dealing with 

the Class, industry practice, Facebook’s Self-Serve Ad Terms, and Facebook’s Advertising Help 

Center. For example, the Self-Serve Ad Terms were drafted by Facebook to “apply to [Class 

members’] use of the self-service advertising interfaces and APIs ... (collectively, the ‘Self-Serve 

Ad Interfaces’),” and those terms state that “you can cancel your Order at any time through our 

online portal”—the implication being that there would in fact be advertising interfaces for Class 

members to use. Facebook’s Advertiser Help Center also refers to Facebook’s advertising interfaces 

on several occasions. 

62. Another of Facebook’s obligations is to track the advertising it places for Plaintiffs 

and Class members and report metrics by which Plaintiffs and Class members can evaluate the 

performance of their advertisements. This obligation is implied by Facebook’s course of dealing 

with the Class, industry practice, statements made by Facebook in the Advertiser Help Center and in 

standardized communications with the Class. For example, Facebook has stated in its Advertiser 

Help Center: “You can always go to Ads Manger to see how your ads are performing,” and “When 

you create a Video Views campaign, we’ll measure both impressions and engagement with your 

videos.” And when Facebook approves an advertisement, it sends a standardized email that states: 

“Your ad is approved and should begin delivering shortly. Click the ad name below to manage it or 

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view its performance.” 

63. Under California law, Facebook was required to perform its contractual obligations 

competently and with reasonable care. Facebook breached that duty by incorrectly measuring 

viewer engagement with the advertising it placed for Plaintiffs and Class members; by including 

inaccurate data in the advertising interface that it provided to Plaintiffs and Class members; and by 

reporting inaccurate advertising-performance metrics to Plaintiffs and Class members. 

64. Had Facebook used reasonable care, it would have calculated the video-viewing 

metrics correctly, it would have discovered any calculation errors through routine auditing and 

verification, and it would not have used an incorrect formula for over two years. 

65. As a result of Facebook’s failure to provide its agreed advertising services 

competently and using reasonable care, Plaintiffs and Class members purchased advertising services 

they would not otherwise have purchased and failed to receive the benefit of their bargain. They are 

entitled to damages in an amount to be proven at trial. 

66. On behalf of the proposed Class, Plaintiffs have notified Facebook that it is in breach 

and given it an opportunity to remedy the harm suffered by the Class, but Facebook has refused. 

THIRD CAUSE OF ACTION 

(On behalf of the Class) 

QUASI-CONTRACT CLAIM FOR RESTITUTION 

67. Plaintiffs re-allege and incorporate by reference herein all allegations contained 

above, with the exception of those allegations included in Plaintiffs’ Second Cause of Action. 

68. As an alternative to the Second Cause of Action, and in the event the parties’ 

agreements for video advertising services are found not to cover Facebook’s provision of videoadvertising metrics, Plaintiffs seek restitution in quasi contract. 

69. Facebook’s inflated metrics made its video-advertising appear more effective and 

valuable than it really was—leading Plaintiffs and the Class to pay more money to Facebook for 

video-advertising services than they otherwise would have paid.

70. Facebook knew about, accepted, and benefited from Plaintiffs’ and Class members’ 

purchase of these video-advertising services. 

71. Under the circumstances, it would be inequitable for Facebook to benefit from its 

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inaccurate calculation of video-viewership metrics and failure to correct the error for more than two 

years. 

72. To avoid injustice, Plaintiffs and the Class accordingly seeks restitution and/or 

disgorgement of profits in an amount to be proven at trial. 

PRAYER FOR RELIEF 

 WHEREFORE, Quirky, on behalf of itself and the Class, seeks the following relief: 

 A. An order certifying this action as a class action under Fed. R. Civ. P. 23, defining the 

Class as requested herein, appointing Cohen Milstein Sellers & Toll PLLC and Gibbs Law Group 

LLP as Class counsel, and finding that Plaintiffs are proper representatives of the Class requested 

herein. 

 B. Plaintiffs request injunctive relief. Awarding injunctive and other equitable relief as 

is necessary to protect the interests of the Class, including: (i) an order prohibiting Facebook from 

engaging in the wrongful acts described herein; (ii) requiring Facebook to engage third-party 

auditors to conduct audits and evaluations of Facebook’s advertising metrics on a periodic basis and 

ordering them to promptly correct any problems or issues detected by these auditors, and (iii) 

requiring Facebook to disclose any further inaccurate advertising metrics in a timely and accurate 

manner. 

 C. Plaintiffs also request damages, restitution, attorneys’ fees, statutory costs, and such 

other and further relief as is just and proper. Plaintiffs seek attorneys’ fees under California Code of 

Civil Procedure 1021.5. 

JURY TRIAL DEMAND

 Plaintiffs hereby request a jury trial for all issues so triable. 

DATED: February 2, 2017 Respectfully submitted, 

By: /s/ Eric Gibbs 

ERIC GIBBS (SBN 178658) 

ehg@classlawgroup.com 

DYLAN HUGHES (SBN 209113) 

dsh@classlawgroup.com 

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AARON BLUMENTHAL (SBN 310605) 

ab@classlawgroup.com 

GIBBS LAW GROUP LLP 

505 14th Street, Suite 1110 

Oakland, CA 94612 

Telephone: (510) 350-9700 

Facsimile: (510) 350-9701 

By: /s/ Geoffrey Graber 

ANDREW N. FRIEDMAN (pro hac vice forthcoming) 

afriedman@cohenmilstein.com 

GEOFFREY GRABER (SBN 211547) 

ggraber@cohenmilstein.com 

ERIC KAFKA (pro hac vice forthcoming) 

ekafka@cohenmilstein.com 

COHEN MILSTEIN SELLERS & TOLL PLLC

1100 New York Ave. NW, Fifth Floor 

Washington, DC 20005 

Telephone: (202) 408-4600 

Facsimile: (202) 408-4699 

MICHAEL EISENKRAFT (pro hac vice forthcoming) 

meisenkraft@cohenmilstein.com 

COHEN MILSTEIN SELLERS & TOLL PLLC 

88 Pine Street, 14th Floor 

New York, NY 10005 

Telephone: (212) 838-7797 

Facsimile: (212) 838-7745 

AISHA CHRISTIAN (pro hac vice forthcoming) 

129 West 27th Street, 11th Floor 

New York, NY 10001 

Telephone: (646) 285-2029 

CHARLES REICHMANN (SBN 206699) 

charles.reichmann@gmail.com 

LAW OFFICES OF CHARLES REICHMANN 

16 Yale Circle 

Kensington, CA 94708-1015

Telephone: (415) 373-8849 

Counsel for Plaintiffs and Proposed Class

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