Facebook continues to face legal headwinds from disgruntled consumers who have taken an issue with the company’s policy on social casino apps. The lawsuit filed with the Court of Northern District of California San Jose Division alleges that the company participated in an “illegal gambling conspiracy,” Law Street reported.
Social Apps Again Targeted on Facebook
Plaintiffs target the social apps found on Facebook that they argue are operating under a fall pretense, advertising themselves to consumers as non-real money games. The case was originally brought up in April, but on Monday, plaintiffs introduced an amended complaint that elaborates their case and Facebook’s alleged involvement with those apps.
For starters, the plaintiffs claim that the apps are highly-addictive in nature and offer products that are manipulative to the point that they cause significant financial damage. An unrelated case of a woman spending $678,000 on a social casino app is indicative of the potential impact those apps may have.
While laws have been fairly lax towards social casinos, some states clearly prohibit them, the complaint argues, and yet such apps were found in those states all the same. The complaint further elaborates that even virtual gambling chips are “a thing of value.”
Plaintiffs cited a Ninth Circuit case which ruled as much. The premise is based on the fact that because of the way the creators of such chips push them to consumers, they bring value back to those creators, and often earn them millions worth of real money.
Is Facebook to Blame? Plaintiffs Think So
While Facebook has never shown any interest in aggressively advertising gambling products and used a blanket attitude towards all products found on the platform, the plaintiffs want to argue that Facebook was a major facilitator in the “gambling conspiracy.”
According to the complaint, the social media giant takes a 30% financial cut for hosting the game, which would make it complicit. In other words, the complaint argues that Facebook “controls” and “promotes” illegal gambling. The complaint further suggests that the social media company and such developers are in cahoots:
“Illegal Slot companies and [Facebook] work together to target and exploit high-spending users, or ‘whales,’ as Illegal Slot companies like DoubleDown refer to their top-spenders.”
The plaintiffs want from court to order Facebook to stop participating in the “Social Casino Enterprise” and to further return all funds obtained through this activity. The demand for relief is based on several established laws, including the California’s Unfair Competition Law, Racketeer Influenced and Corrupt Organizations Act.
Previously, Facebook came under fire in Australia for allegedly using children’s data to drive “predatory ads AI.”