Law Management Blog

Just another Blog for Lawyers

Facebook facing legal action for ‘harvesting’ users’ money

leave a comment »

Social networking mammoth, Facebook, is facing a class-action lawsuit after taking unauthorised payments from users’ credit cards through deceptive online games.

Immensely popular titles such as FarmVille, in which users pay for farming equipment to cultivate virtual fields, have allegedly been signing users up for subscriptions and hidden fees without their consent.

Third-party software developer Zynga, which operates FarmVille and other popular applications, has been offering users real-world incentives for using its games but did not make them aware of hidden costs in participating.

“Over the last four years, Zynga and Facebook have generated enormous profits through these misleading special offers,” says court papers published online.

The class-action group is seeking $5m (£3m) in damages and legal papers accuse Zynga and Facebook of “unfair competition” and “unjust enrichment”. But Facebook has refuted the allegations and accused Zynga of violating the site’s terms and conditions.

Earlier this month, Facebook forced Zynga to remove several advertisements in newly released games and experts believe almost a third of the company’s $250m (£151m) in revenue earned this year has come from in-game offers.

Over 60m people are currently ploughing away on FarmVille and Zynga has decided to stop promoting in-game offers until they are deemed legitimate and of “good quality”, according to the Guardian.

Advertisements

Written by Andrew Hodges

December 15, 2009 at 8:40 pm

Posted in Comment, LinkedIn

Tagged with , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: