July 8, 2011, 3:42 PM

Facebook modifies its currency rules after a consumer group complains

The change focuses on the prices social game developers can charge for virtual goods.

Lead Photo

Facebook Inc. has updated the policies developers must follow if they use Facebook Credits, a currency consumers can use to buy virtual goods within the social network. The tweak follows a complaint last month from a consumer group that accused Facebook of anti-competitive behavior because of its Credits policies.

As of July 1, Facebook Credits is the only payment form accepted to process purchases of virtual goods on Facebook.

The previous policy said developers couldn’t charge lower prices for virtual goods outside of Facebook than they charged on Facebook. The new policy says developers cannot charge a higher price for virtual goods consumers buy on Facebook than they would charge users if they bought virtual goods through another venue, such as a game developer’s own web site or another social network.

Reading between the lines, this means developers can now charge different prices for virtual goods sold outside of Facebook, provided the consumer is not logged in to Facebook at the time of purchase, says Consumer Watchdog, the advocacy group. Consumer Watchdog filed a complaint with the Federal Trade Commission on June 28 that called for the agency to investigate the development and policies of Facebook Credits for what the group called anticompetitive practices.

“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,” says John M. Simpson, director of Consumer Watchdog’s Privacy Project. Simpson says that even though Facebook changed one policy provision, Consumer Watchdog still wants the FTC to investigate other Facebook Credits policies the group considers predatory.

Facebook did not respond to a request for comment on whether the antitrust complaint prompted the policy change.

Apple Inc. courted similar pricing issues recently over subscription content sold through apps in its App Store, such as magazine or newspaper subscriptions. Apple, No. 3 in the Internet Retailer Top 500 Guide, had a policy that stated an app publisher that offered app-based subscriptions outside of the App Store had to also offer them for sale at the same price or less in the App Store.  The move was controversial because Apple takes a 30% cut of subscription sales; a publisher could afford charge less on its own site because it does not have to pay Apple a hefty commission. Facebook also take a 30% cut of Credits-based sales.

Apple last month eliminated the requirement that publishers sell their content in the App Store, so long as the app in the App Store does not direct consumers away from the App Store to buy the content elsewhere.

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