25 October 2014

Antitrust suit filed over Facebook Credits

30 June 2011  |  7122 views  |  0 STOP

A US public interest group has filed a complaint against Facebook, claiming the social network's plan to force game developers to use its virtual currency for payment processing violates antitrust law.

New Facebook Credit terms are set to come into effect on 1 July, enabling the firm to strengthen its grip on the virtual goods market, expected to be worth $2.1 billion this year.

The tough new rules mean game developers using the Facebook platform must exclusively use Facebook Credits in the operation of their games, must agree not to charge lower prices to consumers outside of site and must pay a 30% service fee for all purchases using the currency.

Consumer Watchdog has filed a complaint with the Federal Trade Commission (FTC) asking it to issue an injunction to stop this "anticompetitive behaviour". It is also asking the FTC to look into a deal Facebook has already struck with games giant Zynga as a possible "unreasonable restraint on trade".

Says the complaint: "FTC investigation and enforcement is necessary to prevent Facebook from destroying competition in the market for virtual goods purchased in social games, and eventually in other markets for purchasing goods or services on the Internet, to protect existing businesses from being unfairly boxed out of the market, and to allow new businesses to enter the relevant markets, and ultimately, to protect consumers from higher prices."

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KeywordsSOCIAL MEDIA

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