Facebook Sued by Kickflip for Monopolizing Virtual Currency on its Social Network

October 31, 2012 -

A federal antitrust complaint filed by virtual-currency and payment-processing provider Kickflip (doing business as Gambit) claims that Facebook destroyed its business when it took over the virtual currency used in games on its social network. Prior to that move, Kickflip claims that it was a "leading virtual-currency and payment-processing provider to software developers that published games on Facebook and other social networks."

"Social-game developers attract massive audiences for their games by offering free gameplay," the complaint states. "Once a player is engaged, the developer can offer in-game enhancements in exchange for virtual currency, which the player must earn or purchase."

"Until Facebook violated antitrust laws, game developers turned to a vibrant and competitive market of virtual currency and payment-processing service providers," the complaint continued. "They competed vigorously on service and price. And they were all successful in meeting consumer needs and generating significant revenue."

Kickflip goes on to say in its complaint that in mid-2009, there were 20 virtual-currency service providers available to social-game developers. But later that year Facebook began offering its own currency and "prohibited social-game developers from using its network unless they agreed to use its virtual-currency services exclusively, and it "blacklisted" Gambit."

Kickflip has asked the federal court for an injunction, unspecified damages and treble damages for tortious interference, illegal tying, monopolization, and attempted monopolization.

Source: Courthouse News


 
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