Yahoo Finance Facebook under fire as US officials back removal of Zuckerberg as chairman
Mark Zuckerberg came under fresh pressure after four US officials called for a boardroom shakeup at Facebook.
Three state treasurers and a top official from New York have joined a shareholders’ motion to install an independent chairman at Facebook, claiming the move would improve governance and accountability.
They have endorsed an ongoing campaign to oust Mr Zuckerberg from his dual role as chair and chief executive just weeks after his company was engulfed in the biggest data breach to ever hit a social media company.
In June, Boston-based Trillium Asset Management, which holds $11m in Facebook shares, launched an effort to split the role of chairman and chief executive at Facebook following scandals over the hacking of personal data from millions of users and claims of hate speech and election-rigging.
The motion has now received additional support from Illinois state treasurer Michael Frerichs, Rhode Island state treasurer Seth Magaziner, Pennsylvania treasurer Joe Torsella, and New York City comptroller Scott Stringer.
The move comes as Facebook was presented with a new legal challenge. The technology company has been accused of misleading advertisers by inflating the viewing figures for videos on its site.
A group of US advertisers launched a fraud claim against the social media giant on Tuesday, stating that it had overstated the average viewing time of advertising videos on the site by between 100 and 900pc before reporting them in 2016.
Facebook said this claim was without merit and has filed a motion to dismiss the legal action.
These figures, first reported by the Wall Street Journal, are much higher than those released by Facebook two years ago, when it admitted to miscalculating views of video adverts on its site and said that they were likely overestimated by 60pc to 80pc.
Claimants launched this lawsuit after reviewing around 80,000 pages of internal Facebook records that they obtained as part of court proceedings. According to them, Facebook’s internal documents showed that the company had never performed a full audit of its video metrics.
A Facebook spokesman said: "This lawsuit is without merit and we've filed a motion to dismiss these claims of fraud. Suggestions that we in any way tried to hide this issue from our partners are false. We told our customers about the error when we discovered it - and updated our help centre to explain the issue."
The claimants say that Facebook knew about irregularities in its video metrics in January 2015 and had identified the miscalculation within a few months, but “recklessly” failed to disclose the information for over a year.
“The wide disparity between the actual average viewership and Facebook’s reported metrics should have been corrected immediately,” the claim stated. “But Facebook severely understaffed the engineering team in charge of fixing errors - employing as few as two engineers - and this led to long delays before errors were fully investigates and corrected.”
In court filings that US publishers trade organisation Digital Content Next campaigned to unseal, the claimants stated that Facebook continued reporting incorrect viewing figures for several months and developed a “no PR” strategy to avoid drawing attention to the error.
"For years, Facebook has graded its own homework to the benefit of its shareholders and to the detriment of its advertising partners and a healthy marketplace," said Jason Kint, chief executive of Digital Content Next.
"This unfair and deceptive behavior underscores why industry and policymakers should have zero trust in the leadership of Facebook."
