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Trouble in FarmVille: Facebook, gaming company face lawsuit over deceptive ads
Mitch Lipka
Dec 10th 2009 at 6:30AM evb_url = ''; evb_small(evb_url); More Text SizeAAA
Filed under: Kids and Money, Technology, Fraud, Consumer Ally
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For the players of Mafia Wars, Vampires, FarmVille and a handful of other Facebook games, the temptation of earning "virtual currency" by clicking on the various offers that popped up on the page was too much to pass up. Unfortunately, what these gamers didn't realize at the time was that the advancement of their virtual characters came at the expense of their own personal bank accounts.

Now, some are fighting back by filing a lawsuit against Facebook and Zynga, the maker of the games. The suit, which is seeking class action status, claims that some offers in the games prompted a series of unauthorized charges or triggered enrollments in programs without the user's knowledge. More than 100,000 people fell victim to these offers, losing more than $5 million, the lawsuit claims.

Among several other examples, the lawsuit cites an IQ test that requires the user to provide their cell phone number. After doing so, some were billed for a text messaging service. Another example from the lawsuit involved an offer that asked consumers to sign up for a "risk-free" trial subscription to a green tea herbal supplement program. Yet somehow that trial became a difficult-to-cancel subscription that every month delivered tea and pills from China.

The only named plaintiff in the lawsuit, Rebecca Swift of Santa Cruz, Calif., said she was charged more than $165 for two months' worth of pills and tea before she was allowed to cancel. She said she first tried to cancel during the trial period, for which she was supposed to pay $5.95 to cover shipping.
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In a written statement to WalletPop, a Facebook spokeswoman said the company was not involved in the ad placement and didn't profit from it. She also said Facebook has been working to clear its pages of scam ads and the company is committed to fighting the suit.

"The ads in question appeared in third-party applications, were not from Facebook, and provided no benefit to Facebook," she wrote. "However, we are concerned about any potential threat to our users' experience. As a result, we have, and will continue to, take action against both the ad networks and developers who violate our principles or policies. We do not see any merit in this suit and we will fight it vigorously."

Facebook said it is committed to banning ad providers that deliver content in violation of Facebook "principles or policies" and already has cut off four providers.

Zynga, billed as the most popular social gaming company, is in a different situation. Its CEO had the misfortune of being videotaped explaining that his hunger for cash outstripped his interest in keeping his users from being subjected to unsavory offers.

In the video, CEO Mark Pinkus said: "I did every horrible thing in the book to, just to get revenues right away. I mean we gave our users poker chips if they downloaded this ... toolbar which ...I downloaded it once and couldn't get rid of it. We did anything possible just to get revenues so that we could grow and be a real business."

A Zynga spokesperson said the company would not comment on the lawsuit, but said it will no longer let scam ads appear with its games.

"Our mission is to provide users with the best possible experience. We deeply regret any difficulty this may have caused users and to make sure we continue to offer the best user experience, we took all offers down," a Zynga spokesperson said in an email to WalletPop. "We take our responsibility to our users very seriously and will continue to take steps to ensure they have a fun and positive game play experience."

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Ethical Procurement
Ethics dictates that business be conducted with integrity, fairness, and openness, which require open communication within and among both buying and supplying organizations, ensuring a competitive procurement, and thereby give any organization a chance to compete for contracts and win. It seems like a week does not go by without one hearing a story demonstrating lapses in business ethics stories, where lucky contract winners share close friends in strategic places, as was the case of Halliburton, which was awarded billions in federal no-bid contracts during the years when Dick Cheney was its chief executive officer (CEO).
Recognizing this longstanding problem of competitive procurement becoming the exception, the US government launched the Federal Acquisition Regulation(FAR) more than twenty years ago, to help federal agencies manage procurement more efficiently. FAR is an official document setting forth procurement policies and procedures that US Federal agencies should follow when soliciting offers (bids or proposals) for goods, products, services, or construction from qualified suppliers. Rules are delineated into eight chapters:
General Information, Definitions, Practices, and Administrative Matters
Competition and Acquisition Planning
Contracting Methods and Contract Types
Socioeconomic Programs
General Contracting Requirements
Special Categories of Contracting
Contract Management
Clauses and Forms
In response to competition becoming the exception rather than the rule in procurement, Part 6 of the FAR, Competitive Requirements, incorporated the Competition In Contracting Act (CICA). It seeks to establish full and open competition (FOC) as the standard, in order to eradicate partiality, favoritism, political lobbying, and bribery.
In light of these corporate scandals and the heightened scrutiny over corporate practices, FAR will have a greater impact on business. It contains key elements that all organizations should be aware of, whether they are conducting business with a government agency, or with private entities. Using the policies and procedures outlined by FAR, we will
define what exactly is a competitive procurement, its purpose and benefits;
present the different competitive and non-competitive procurement methods and their supporting processes; and
detail the two key procurement methods:
Invitation for bids (IFB), and
Request for proposals (RFP).
Competitive Procurement
Benefits of Competitive Procurement
The purpose of competition is to benefit your enterprise, and competition should not be promoted for the sake of competition. Indeed, in some cases, it may cost more to enter into a competitive procurement to do business directly with a supplier because of the unicity of the requested products, theinadequacy of other sources, the immediacy of your needs, or the emergencyor legitimacy of circumstances. In other words, competitive procurement should be promoted pragmatism, with other methods thus becoming exceptions.
Competitive procurement is the contractual acquisition (purchase or lease) by an organization of any kind of asset, whether material (goods, products, or construction) or immaterial (services) with appropriated funds, enabling all deemed responsible sources to compete in a fair and open environment. Competitive procurement is also known as full and open competition (FOC), orcompetitive solicitation.
While procurement is supposed to bring fairness, impartiality, transparency, and suitability to corporate practices, a competitive procurement process will ensure the highest level of openness, thus maximizing the suitability of the requested assets or services, and the best return on investment (ROI).

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