Sony has been hit with what appears to be a major legal action.
Per a report from Sky News, Sony is being sued for £5 billion by nine million claimants who have alleged the company of having “ripped people off” with overpriced games and in-game purchases through the PlayStation Store. The game giant charged a “30% commission on every digital game and in-game purchase” made through its storefront and made “as much as £5 billion over the last six years,” it’s claimed.
“The game is up for Sony PlayStation,” claims consumer rights champion Alex Neill, who brought the legal claim and noted the following:
With this legal action I am standing up for the millions of UK people who have been unwittingly overcharged. We believe Sony has abused its position and ripped off its customers.”
Gaming is now the biggest entertainment industry in the UK, ahead of TV, video and music and many vulnerable people rely on gaming for community and connection. The actions of Sony is costing millions of people who can’t afford it, particularly when we’re in the midst of a cost of living crisis and the consumer purse is being squeezed like never before.
The partner leading the case, Natasha Pearman, added:
Sony dominates the digital distribution of PlayStation games and in-game content; it has deployed an anti-competitive strategy which has resulted in excessive prices to customers that are out of all proportion to the costs of Sony providing its services.
This claim is only possible because of the opt-out collective action regime that was introduced by the Consumer Rights Act 2015; a regime which Alex fought to introduce. We are looking forward to working with Alex and making sure that the regime achieves its aims of protecting and compensating consumers.
Making the claim possible is the “opt-out collective action regime that was introduced by the Consumer Rights Act 2015,” something that Neill “fought to introduce.”
Class members won’t have to pay any of the costs of the action themselves thanks to Woodsford, a “specialist team of litigation and arbitration experts investing in large commercial claims” that has agreed to fund the action.
Source: Sky News
Discussion (17 replies)
Join Discussion →Fair. I want to see if this is actually successful or not.
I don't get it.
I can't say I'm familiar with the UK law that is triggering this... but why aren't they also suing Microsoft / Apple / Google / Valve / Epic / etc.
They all charge a commission as well, and many of those are also 30% - why aren't they also being sued?
I have a feeling if this gets through the court systems with any profit they will be. Gotta prove precedence somewhere.
Good riddance, PS Store has ridiculous prices all over europe, 50% markup over retail at least, for a digital distribution platform, they are crazy.
Well they can try, Epic tried with apple, how is that going? For Playstation you can buy retail in a number of stores so not sure what leg they can stand on as you are not forced to buy digital only (well if you bought a console with optical drive that is)
I think that is exactly it. That you can buy retail at much cheaper, so they charge more without adding any value, arguably less value since a physical copy has to be manufactured and distributed.
Well, two parts:
First, Sony will be the first to argue they aren't the exclusive console, video game, or entertainment provider : you could get a Switch or Xbox, and play many of the same games. They are the exclusive digital distributor for Playstation, which is true, but Playstation hardly has a monopoly on the entertainment market.
Second, in the Epic v Apple suit: the law did not strike down the Apple App Store as the exclusive distributor on the iOS platform. They just said you can't force all transactions to go through that -- that means developers can process their own payments and transactions, but not necessarily that Apple has to allow third-party installation methods. In a parallel, it would allow developers to sell DLC and the like directly from inside their games without going through the storefront, but it doesn't necessarily give them license to make their own entire storefront (although, I guess you could make a shell app and have stuff run from inside of that if you really wanted to push the letter of the law).
Tangentially - I wouldn't call digital distribution a zero-overhead distribution method. You still have to pay for the development and maintenance of the storefront, the CDNs to host and distribute the files, and security. It isn't the same as Physical Retail, I won't say it's more or less in terms of cost - but it isn't zero. And it does add convenience to the consumer: the ability to redownload, the ability to procure and install nearly instantly, no media DRM that can get damaged or scratched.
You still seem to be missing the point. Sony sells these games much cheaper at retail stores, which means they are upselling digital downloads, there is nothing else to it. It has nothing to do with what percentage is the commission. or whether they are exclusive or a monopoly. This is not a monopoly suit. I'm not familiar with UK law, but there must be some rule there preventing selling a product at a higher price without adding value, a.k.a anti scalper law. Sony is basically playing scalper in Europe with their digital store, and i'm happy they finelly got some trouble for it.
Add me to the list of those confused. The few articles (if you can call them that) I've read just reiterate the claim(s) without addressing competition law. Wikipedia does have an article on the Consumer Rights Act 2015, if one is sufficiently motivated to follow the relevant links, including citations. I was not.
The "Documents" section from playstationyouoweus.co.uk only contains a link to a press release.
From the FAQ:
Readers from outside the UK may not be familiar with the "opt-out collective action regime" referenced from the FPS article:
US-style class actions introduced in UK (BBC News)
The United Kingdom’s New Opt-Out Class Action: The Unique Perspective of a “Third Generation” Statute (qmro.qmul.ac.uk)
Edit: fixed links.
No, there really doesn't. That's how stores compete against each other in retail space all the time -- all of them are selling the same things, at different prices all the time. There's no law that says Thou Shalt Sell at MSRP, or that you can't put an item on sale when your competitor doesn't.
Otherwise how would gas stations, or grocery stores, or Wal-Mart compete against each other
If you don't want to buy digital, buy physical retail. If you don't want to support Sony, buy Nintendo. This looks mostly like a lawyer looking for a payout - especially since they are plastering their face all over it.
I don't understand how this is lawsuit material. On what grounds?
As a seller you are free to ask whatever price you want for something, and buyers are free to say "haha, nope" and not buy it if they think it is too high.
If it were on antitrust grounds maybe... but this makes no sense to me.
My reading of the description of the law (which is stymied in legaleze) just seems to allow what we call class action lawsuits. It sounds like previously - in the U.K. members of the class had to opt in to a class action, making it difficult to bring one. Now they can proceed with a class action like we do here, making members of the class opt out if they aren't interested.
I don't read anyhting in that law that speaks to the grounds on which they are suing Sony, only the method of the suit.
From the FAQ: "We believe Sony’s conduct in relation to PlayStation amounts to an abuse of a dominant position which is in breach of UK/EU competition law, for the following reasons..."
But don't ask me how they plan to substantiate their accusations...
"These prices are out of all proportion to the costs of Sony providing these services to its customers"??
Hey, I call 'em that too! ;) (I'm also from the United States.)
Exactly. That's the only relevance of the Act to this suit that was immediately apparent. I don't know whether other parts the Act are of relevance to the claim itself.
It'll be interesting to see what becomes of this.
Sure, Sony's PSN pricing is insane if stuff is not on sale. But is it any better on xbox?
What cheeses me about it is you can end up paying more just bc it's a convenience. Don't have to put pants on to go to the store. Except you don't have to do that with 'Zon either I guess. Although my Zon delivery drivers probably don't love seeing me in my briefs.
Nope, but you gotta wait a day or two.