Facebook revises virtual money terms in wake of anti-trust complaint

Facebook revises virtual money terms in wake of anti-trust complaint

Facebook has revised terms for game developers using its virtual money system in the face of an anti-trust complaint from US public interest group Consumer Watchdog.

Under the revised terms, a developer can now offer cheaper prices for games playing on other platforms as long as the player isn't logged into Facebook.

The changes in the terms were slipped out quietly by the social networking giant on the eve of the 4 July holiday weekend as the company began requiring all virtual goods sold through game applications to be bought with Facebook Credits. Until 1 July, game developers could take payment for their games' virtual goods directly using PayPal or credit cards.

The new terms still require developers to use Facebook Credits exclusively to sell virtual goods in their games and to pay a 30% fee for all transactions.

John Simpson, director of Consumer Watchdog's Privacy Project, comments: "Faced with an antitrust complaint, Facebook tweaked one blatantly anticompetitive provision, but they've used their monopoly position to maintain an onerous burden on developers that ultimately will mean higher prices for consumers."

Simpson maintains that FTC action is still "essential", pointing out that the social network controls well over 50% of the estimated $2.1 billion market for virtual goods offered in social gaming.

Laura Antonini, Consumer Watchdog research attorney, says: "While this specific modification quells concerns about the effects of the Credits terms on other possible markets which may arise through the Facebook platform, we still need to remember that Facebook holds monopoly power in the market for virtual goods purchased in social games so it's important to keep a close eye on its pricing terms in this market."

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