Is Facebook India Credits Engaging In Anti-Competitive Behavior?

Is Facebook India Credits Engaging in Anti-Competitive Behavior?

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Facebook Credits which got launched in the month of June in India has run into trouble if sources have to be believed. Consumer rights activist, CUTS International has urged CCI, the competition watchdog in India to look into the ways and means Facebook credits are being used. CUTS fear that there could be potential misuses by India’s most active social networking site and expressed:

“Facebook can potentially engage in anti-competitive and unfair business practices in the market for virtual goods purchased in social games through its Facebook Credit terms in India and therefore its activities in this regard need to be investigated by the CCI.”

Facebook launched its virtual or social currency on 16th July in India as a way to enable users to buy virtual goods and service in Facebook games, apps and to watch movies. This feature was also liked by the developer community who now can use the credits to charge for

FB Credits

the apps and games developed by them on Facebook. The majority of applications that are built by outside developers reach the users through the Facebook platform under the terms dictated by Facebook itself. This business model is likely to be the concern of CUTS. CUTS is also worried that if this is being overlooked now, then it could be a bigger issue since Facebook Credits have great potential to grow rapidly within the next five years.

However, this is not the first of its case as a similar complaint was filed in US against Facebook by a consumer group. The consumer advocacy group filed its complaint with the US Federal Trade Commission against Facebook arguing that rules of payments system are anti-competitive thereby creating a monopoly in the industry.

CCI has received the concerns raised by CUTS but it would be interesting to see what would be Facebook’s stance. Though it has not commented on the statements made by CUTS but it would be interesting to watch what move Facebook takes, considering that it is working on the expansion plans of its Facebook Indian Office.

Source: Indian Express