New Salvo Fired by Forces Combatting Facebook Credits

Mercator Overviews

by Mercator Advisory Group July 1, 2011 2:14 pm0

Consumer Watchdog, a California-based not for profit, filed a complaint with the U.S. Federal Trade Commission this week asking for an investigation and injunctive relief from anti-competitive practices by Facebook. The complaint alleges that Facebook’s new policy requiring the use of Facebook Credits, and only Facebook Credits, for onsite virtual game purchases, amounts to a restraint of trade. It further alleges that Facebook has entered into a special relationship with the largest maker of virtual games, Zynga, “apparently exempting it [Zynga] from the application of certain, undisclosed terms.”

According to the complaint:

“The antitrust laws protect users against unfair methods of competition and unfair practices that reduce competition, discourage innovation, limit consumer choices and increase prices. That is precisely what will result if Facebook is permitted to enforce its new Facebook Credits terms.”

There has been much media debate and speculation about Facebook’s ultimate goals for Credits. Significant revenue is at stake for game developers and other sellers of virtual goods –a multi-billion dollar market – because Facebook claims a 30 percent commission on all Credits purchased. Consumer Watchdog is attempting to bust up a potential monopoly before Facebook gets it fully established. Stay tuned to the FTC for developments!

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