Consumer Watchdog barks at Facebook Credits, Zynga-Facebook deal

Facebook Credits antitrust
Facebook Credits antitrust

You know that whole shift to Facebook Credits that is supposed to happen this Friday? Well, that's not gonna' happen--not if Consumer Watchdog has anything to do about it. As of July 1, all Facebook apps and games will essentially be forced to take on the Facebook Credits payment model, from which the company takes a 30 percent cut. The Washington-based nonprofit public interest organization has openly called Facebook out on potentially violating anti-trust law and participating in anti-competitive behavior.

"This isn't just about fun and games," Consumer Advocate John M. Simpson said in a release. "These activities in the virtual world are a big business, worth billions of dollars. If Facebook is allowed to dictate terms in the online gaming market though anti-competitive tactics, consumers will pay more and innovation will be stifled."

More importantly, however, Watchdog has also requested that the Federal Trade Commission investigate the five-year deal Facebook made with Zynga last year to keep the $15 to $20 billion developer on board with the changes. That's funny, because the terms of the deal were never officially disclosed (not that we'd expect that). In fact, the two companies were reported to be nearly at each others' throats before the pen met paper in May of last year. So, you have to think Facebook offered quite an attractive package to keep Zynga around. And Watchdog wants to know.

It's not as if this sort of thing hasn't happened before. Apple takes the same cut from any app that is sold through its App Store, but it's the details of the imposition that are setting Consumer Watchdog off. Specifically, Watchdog said that Facebook has prohibited developers from selling their goods on different websites at lower prices, effectively locking them in. Not to mention that the 30 percent cut might be too steep for new developers to meet. This could keep the big players in business, while potentially shutting out new companies and, most importantly, new ideas for games. We've contacted Facebook for comment.

[Image Credit: Marty's Mind]

Are you for or against the Facebook Credits change? How do you think Facebook will respond if the FTC approaches for an investigation? Sound off in the comments. Add Comment.