Latest
news reports reveal that Kickflip Inc has sued Facebook Inc (NASDAQ:FB).
Kickflip does business as Gambit. It claims that the social networking company
has violated antitrust laws in the virtual currency market.
Gambit
was the leading virtual currency and payment processing provider to software
developers that publishes game son Facebook and other social networking sites. Facebook
took a decision in 2009 to offer its own services to developers. However, the
decision destroyed a competitive market, as per lawyers of Kickflip.
The
lawyers said that the social networking giant has leveraged its monopoly in the
social gaming industry to control and rule the separate market for virtual currency
services, as a result of which Gambit’s business was destroyed.
Virtual currency services let social game developers
to issue currency to players in exchange for direct payment in third part
advertising offers. By mid 2009, minimum 20 virtual currency service providers
were available to social game developers, as per the complaint.
Facebook’s
service charged developers a 30% fee and offered only a few services, as Kickflip
mentioned in its complaint. Facebook had compelled its competitors to the
sidelines by blacklisting Gambit and compelling developers to switch to its
services in 2009 and 2010.
Based
in Austin, Texas, Kickflip is appealing to judge to bar Facebook from implementing
its policy and granting unspecified damages, as per the complaint.
A
spokesman for California-based Facebook, Andrew Noyes said in an emailed
statement that the complaint is without merit. Noyes said that Facebook has
plans of defending the claims.
The
concept of Facebook credits was first identified in 2008 when the social
network changed the monetary units for its gifts to ‘credits’. Throughout 2009
and 2010, the company rolled out a method for the developers to work credits
into their apps on platform of the social networking site.
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