(Adds comments from LinkedIn, plaintiffs' lawyer)
By Jonathan Stempel
Aug 4 (Reuters) - A U.S. judge said Microsoft Corp's LinkedIn must face a lawsuit claiming it inflated the number of people who watched video ads on the networking platform, allowing it to overcharge hundreds of thousands of advertisers.
U.S. Magistrate Judge Susan van Keulen, however, on Tuesday dismissed fraud-based claims and an unfair competition claim, saying the plaintiff advertisers did not show that LinkedIn made specific misrepresentations or that its conduct hurt the public at large.
But the San Jose, California-based judge let the advertisers pursue claims based on the theory that bot traffic, errant clicks and fraudulent clicks inflated the metrics they relied on when buying LinkedIn ads.
Led by TopDevz Inc and Noirefy Inc, the advertisers said LinkedIn had been counting video ad "views" from users' LinkedIn apps, even when the videos were playing only off-screen because users had scrolled past them.
LinkedIn said in an email on Wednesday it looked forward to showing the claims lacked merit and said it was "committed to the transparency and integrity of our ads products."
Warren Postman, a lawyer for the plaintiffs, said in an email he was pleased with the decision and looked forward to proving that LinkedIn broke the law.
Van Keulen said the plaintiffs could try to pursue their dismissed claims again.
The advertisers sued after LinkedIn https://business.linkedin.com/marketing-solutions/blog/linkedin-news/2020/how-we-re-working-to-improve said on Nov. 12 that its engineers had three months earlier found and then fixed software bugs that may have led to more than 418,000 overcharges.
LinkedIn said more than 90% of the overcharges were less than $25, and that it provided credits to virtually all affected advertisers.
In their lawsuit, the advertisers said the overcharges left them with less money to spend elsewhere, including on ads. They are seeking unspecified damages and restitution.
The case is In re LinkedIn Advertising Metrics Litigation, U.S. District Court, Northern District of California, No. 20-08324. (Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy and Dan Grebler)