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Snapchat facing lawsuit amid claims it inflated user numbers to Chinese retailer Alibaba

SnapChatSnapchat lied about user numbers to prospective investors, including Chinese retailer Alibaba, as it planned a possible $25b float, a lawsuit against the social media company has claimed.

Anthony Pompliano, who briefly worked at Snapchat in 2015, alleges company executives “repeatedly” made false claims about metrics, The Guardian has reported.

A lawsuit filed in Los Angeles claims Snapchat “will not let anything stand in the way of an IPO, including its obligations to represent material facts accurately”.

Pompliano says he was fired by Snapchat because he refused to participate in a scheme “to deceive the public and artificially inflate Snapchat’s valuation in anticipation of its IPO”.

Alibaba was one of the companies deceived, the lawsuit claims.

Snap, the parent company of Snapchat, have dismissed the allegations as “made up by a disgruntled former employee”, adding the accusations “have mo merit”.

FacebookNews of the lawsuit comes at a sensitive time for social platforms and their measurement reporting, with Facebook guilty of errors in its figures while Twitter also conceded a bug in its Android app  inflated video advertising metrics by as much as 35% in the run up to Christmas.

The company issued advertisers refunds for over-billing, according to a report in Business Insider.

 

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