Sony to pay $7.85M to 4M+ customers in overcharging settlement

Update: 

• Sony Interactive Entertainment agreed to pay $7.85 million to more than 4 million of its users to end claims it used a monopoly on downloadable game cards to overcharge its PlayStation Store customers.
• The Sony settlement comes nearly two years after a California federal judge declined to toss an amended version of the complaint. 
• The class action lawsuit argued Sony monopolized the sale of digital PlayStation games and charged supracompetitive prices for them. 
• Sony previously argued it had non-monetary reasons for disallowing third-party vendors from selling its downloadable game cards.
• The proposed settlement class includes approximately 4.4 million PlayStation users. 

(May 6, 2021)

Sony has created a monopoly over the sale of digital PlayStation games and charges supracompetitive prices for the games, a new class action lawsuit alleges.

The nationwide class action lawsuit was filed in San Francisco on May 5 by lead plaintiff Agustin Caccuri, who alleges0 Sony violated federal and state antitrust and unfair competition laws by restricting who could sell digital PlayStation Games.

Sony, which manufactures the popular video game console PlayStation, has used the console’s popularity to build PlayStation into a multinational and multifaceted digital entertainment brand, according to the class action lawsuit.

The brand now includes an online store for purchasing and downloading digital video games directly to the console — the PlayStation Store, plus a number of other features.

Despite the immense popularity of the PlayStation console, the bulk of Sony’s profits come from the digital video games and other digital content sold through the PlayStation Store and the PlayStation Network, which produced over $17 billion in revenues for Sony in the fiscal year ending March 31, 2021, the claim states.

“In 2020, digital downloads made up 62 percent of sales for PlayStation games, compared to only 43 percent in 2018,” the claim says.

Until recently, consumers could purchase download codes for digital PlayStation games from the same online and brick-and-mortar retailers that also sell physical games, such as Amazon, GameStop, Best Buy and Walmart. The codes could be redeemed on the PlayStation Store for digital copies of PlayStation games.

However, in April 2019, Sony eliminated retailers’ ability to sell download codes for digital PlayStation games.

The new policy established the PlayStation Store as the only place where consumers can purchase digital PlayStation games, and the only place where video game publishers can sell digital PlayStation games, the class action lawsuit states. Sony also requires publishers who sell digital games on the PlayStation Store to relinquish full control over the retail price.

“As a result, the policy swiftly and effectively foreclosed any and all price competition in the retail market for digital PlayStation games.”

Game prices on the PlayStation are now between 75% and 175% higher than they are in brick-and-mortar stores, according to the claim.

“There is no legitimate reason digital games should be more expensive than their physical counterparts. In fact, given the costs saved on packaging and distribution, prices for digital games in a truly competitive market would likely be lower than they are for games on disk,” the class action lawsuit states.

Caccuri wants to represent anyone in the United States who bought a digital game through the PlayStation Store between April 2019 and now. He is suing for violations of the Sherman Act and state business laws, and seeks certification of the class, damages, injunctive relief and a jury trial.

Anticompetitive practices in the gaming world have often led to legal action. In April, video game company Valve Games was hit with a class action lawsuit for allegedly suppressing innovation in the gaming market and harming both gamers and game developers with its anticompetitive practices. 

Consumers allege that Valve violates federal and state antitrust and unfair competition laws in its domination of the PC gaming market.

Do you use a PlayStation for gaming? What do you think about Sony’s control of digital PlayStation games? Let us know in the comments section.

Caccuri is represented by Jeff S. Westerman of Westerman Law Corp.; Michael M. Buchman, Michelle C. Clerkin and Jacob O. Onile-Ere of Motley Rice LLC; Adrián N. D. Campos of The Law Office of Adrian Campos; Barrett Beasley and Robert L. Salim of Salim-Beasley LLC; and John Alden Meade of Meade Young LLC.

The Sony PlayStation digital game monopoly class action lawsuit is Caccuri, et al. v. Sony Interactive Entertainment LLC, Case No. 3:21-cv-03361, U.S. District Court for the Northern District of California, San Francisco Division.

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