NEWS

Zynga, Facebook Hit With Class Action Suit Over Offer-Based Ads

Tom Ivan's picture

By Tom Ivan

November 23, 2009

See also:

Related Articles:

Social gaming company Zynga and social network Facebook have been named in a class action lawsuit over the deployment of offer-based advertising.

The suit, which seeks upwards of $5 million in damages, alleges that “over the past four years, Zynga and Facebook have generated enormous profits through… false and misleading special offers” that have scammed users into signing up for unauthorised mobile phone charges or mail-order products by disguising them as free offers or trials, reports Valleywag.

“… Facebook is fully aware of the false and misleading nature of the advertising promulgated through Zynga’s applications and that, despite this, it actively engages in promoting Zynga’s games to the public,” reads the suit, which is being handled by Sacramento-based law firm Kershaw, Cutter & Ratinoff (KC&R). It alleges that Facebook shares “a substantial portion” of the revenue generated from the adverts featured in Zynga's games, while Zynga reportedly makes one third of its revenues from commercial offers such as CPA advertising.

FarmVille and Mafia Wars maker Zynga’s most recent title, FishVille, was briefly removed from Facebook because it featured cost-per-action advertising.

Zynga CEO Mark Pincus claimed on his blog that the company had not been able to control the ads that its games were serving to players because they're instead managed by the offer companies with which it works, noting: "We recognise it is our responsibility to ensure that offers which generate a bad user experience are not shown with any of our games. Therefore, we are removing all CPA offers across Zynga games until we can control their inclusion and presentation ourselves."

It is expected that KC&R will use a video of Pincus confessing to doing "every horrible thing in the book just to get revenues" as courtroom evidence.