Back in November, controversy over offer-based ads in social games came to a head, and a class-action lawsuit was filed against both Zynga and, more notably, Facebook itself. Facebook was targeted because law firm Kershaw, Cutter & Ratinoff (KCR) argued that the social network generates “from 10 to 20 percent” of its annual revenue from Zynga’s games, and has been “actively” promoting them, despite being “fully aware of the false and misleading” offer-based ads they contain.
Within the last few days, however, California resident Rebecca Swift (who filed the class-action suit) has withdrawn the suit against Facebook, but she's continuing the litigation against Zynga. It's not clear why the suit against Facebook was withdrawn, but MediaPost notes that Facebook and Zynga both have strong defenses under the federal Communications Decency Act, which apparently immunizes Internet companies from liability for material they didn't create.
Swift maintains that she lost $200 to Zynga because of misleading ads. She had signed up for a "risk-free" trial of monthly shipments of a green tea supplement in order to secure some "YoCash" (virtual currency) for Zynga's YoVille. When Swift tried to cancel within the allotted 15 days, the green tea supplement firm did not honor the request and her credit card was charged.
Zynga recently filed a motion to dismiss Swift's lawsuit, citing protection under the aforementioned Communications Decency Act. "All of Swift's claims are based on content created or developed by third party advertisers, not Zynga," the company stated.
Although Zynga removed the controversial ads from its games last year following the many complaints from users, just last month the social games leader brought its offer-based ads back. Now the ads will have to follow "a strict set of standards" and technology has been implemented to "regularly check offers to verify that only Zynga reviewed offers are displayed.”
