US lawyers float Facebook Credits antitrust suit
Got nothing to lose? Step forward
Exclusive US attorneys are trying to drum up interest in a potential case against Facebook, claiming its Credits virtual currency is breaking US antitrust law.
The firm, Newman DuWors, has thrown up the site Stopfacebookcredits.com to attract game developers and providers of virtual currencies who believe their businesses have been or are being damaged by Facebook Credits.
Newman DuWors hopes to bring either a single or a class-action against Facebook under the US Sherman Act that saw Microsoft prosecuted during the 1990s. Derek Newman with the firm told The Reg on Monday that he hopes somebody who’s been put out of business by Facebook Credits will come forward who he can represent.
Only somebody who is no longer reliant upon Facebook would be willing to take action, he claimed, as everybody else is scared of being "squashed" by the web goliath.
Newman said he already represents one client, a provider of virtual currencies he was unwilling to name but claims has lost $100m since Facebook standardised on Credits in 2011. With losses calculated under the Sharman Act, Newman reckoned Facebook would be forced to pay out $1bn but his client fears they’d lose more by taking the social network.
Newman hopes he can either build a class-action suit against Facebook or work with a somebody big enough or who has nothing left to lose.
“We hope we can generate traffic through the site and there will be somebody who is completely out of business and who has nothing to lose because anybody who is in business with Facebook and weighs the downside against likelihood of winning down the road will come to the conclusion they can’t win down the road,” Newman said.
Facebook last summer introduced Credits as a way for all game developers to process payments on its service. Credits are an integral part of the Facebook platform and until the change, you could use other virtual currencies.
Games delivered as apps for Facebook Announcing must use Credits, and Facebook said at the time:
Credits offers a consistent experience for people to buy, earn and spend a virtual currency across all games on Facebook. We also want to help developers generate revenue and focus on creating games. This only works if everyone supports the same virtual currency.
Facebook said it expected developers to price virtual goods and in-game currency consistently for all logged-in Facebook users. Before Credits, different virtual currency providers had been allowed and were able to make money either by charging for transactions or by using advertising.
Newman claimed Facebook is engaged in a “blatant abuse” of the Sherman Act because it’s tied one service to another – in this case, to get one product, access to the Facebook platform, you must take the other, Facebook Credits. Newman said it is illegal when a company that has substantial market power ties second product to its first.
Facebook was unable to comment at the time of writing, but instead pointed us towards its announcement about the 2011 rollout of Credits. ®
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