A public interest group called Consumer Watchdog has filed an antitrust complaint with the Federal Trade Commission about Facebook Credits, arguing that the virtual currency used for purchases such as assets in online games is anticompetitive.
Specifically, the group objects to new terms for using the credits that go into effect Friday. The group argues in the 28-page complaint (PDF), "The new Facebook Credits terms will enable Facebook to maintain and extend its monopoly power over the market for virtual goods purchased in social games."
In addition, the complaint argues, the new terms prohibit game developers from charging lower prices for their games on a rival social network. Because of that," the complaint said, "Facebook is wielding its monopoly power to dictate prices; this term directly undermines competition outside the Facebook platform, i.e., in the market, and forces users to pay higher prices."
Sweeping remedies are needed, Consumer Watchdog said.
"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," the complaint said.
Specifically, the group objects to new terms for using the credits that go into effect Friday. The group argues in the 28-page complaint (PDF), "The new Facebook Credits terms will enable Facebook to maintain and extend its monopoly power over the market for virtual goods purchased in social games."
In addition, the complaint argues, the new terms prohibit game developers from charging lower prices for their games on a rival social network. Because of that," the complaint said, "Facebook is wielding its monopoly power to dictate prices; this term directly undermines competition outside the Facebook platform, i.e., in the market, and forces users to pay higher prices."
Sweeping remedies are needed, Consumer Watchdog said.
"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," the complaint said.
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