Stephen S. Wu-- SL: Legal Writer,, (408) 573-5737, 50 W. San Fernando St., Ste. 750, San Jose, CA 95113

Controversy About Marketing Practices

On my Facebook page, I recently wrote about a New York Times article on the booming market for virtual goods, but now others have written that game companies are using unsavory methods for obtaining sales leads. Now the lead generation practices have triggered a lawsuit in the Northern District of California.
Here is what I wrote about the New York Times article:

"Another article on the booming market for virtual goods - $5B. This is a story from the NY Times about the growth of the market, and how virtual goods have advantages for users over physical goods (e.g., they can't be damaged). Also, users tout the "experience" virtual goods provide and the emotions they engender. Virtual goods are popular in Asia and are now becoming popular here. Watch for legal battles over ownership and business practices relating to the offering, sale, and management of virtual goods."

In Mike Masnick's blog post on Techdirt, however, Mr. Masnick discusses allegations (in part from Mike Arrington at TechCrunch) that game companies are using "scammy tactics" to fool consumers into purchasing subscriptions to things that they don't really want. See Mr. Masnick's blog post

Now, Eric Goldman flagged a new class action suit against FarmVille and Mafia Wars operator Zynga and Facebook based on these practices. The case is entitled Rebecca Swift v. Zinga Game Network Inc. and Facebook, Inc., and was filed in the United States District Court for the Northern District of California in San Francisco. For a copy of the complaint, click

Swift's complaint is based on California's unfair competition law, which strikes at unfair and deceptive business practices, the California Consumer Legal Remedies Act, and unjust enrichment. I will monitor this case, in addition to the others that appear in this blog.