The legal claim seems to stand on stable ground. The company is accused of abusing their market dominance and overpricing PlayStation videogames. The claim alleges that Sony has engaged in this illicit practice for 6 years now. If the suit is successful, Sony will have to pay 5 billion pounds in damages.
Unfair Market Practices
Consumer advocate Alex Neill claims that Sony has abused its market dominance in the UK to impose unfair terms and conditions on the PlayStation Store, where it sells digital games, downloadable content, and subscriptions. Alex Neill filed the case with the UK’s competition appeal tribunal.
Despite there being no related expenses of creating and shipping hardware, the firm charges a 30 per cent fee on every digital game purchase made through the online PlayStation Store. This has resulted in the prices of digital content frequently being higher than a physical copy of the same item.
Neill has made the claim on behalf of all UK residents who have bought digital games or add-on content from the shop since 19 August 2016, using a British right to collective redress for consumer abuses. If successful, the total amount paid out might reach $5 billion, because the suit demands damages of between £67 (about 32,000 forints) and £562 (275,000 forints) for each individual member.
Neill said, ‘The game is up for Sony PlayStation. By filing this lawsuit, I’m defending the millions of UK citizens who were unknowingly overcharged. We think Sony has taken advantage of its position and cheated its customers.’ He continued by saying that gaming is the biggest entertainment industry in the UK, overtaking TV, video and music. Many people rely on gaming for community, connection and relaxation. The actions of Sony have essentially ‘ripped people off,’ the consumer rights champion said, and made millions at their expense. Especially considering the fact that the UK is facing a cost of living crisis, Sony overcharging is unfair and unethical, Neill claims.
Natasha Pearman, who is the lead lawyer in the case, said that Sony dominates the market in distributing digital PlayStation games and in-game content. They have also implemented a strategy to curb their competition, which drove prices up disproportionately. Pearman noted: ‘The opt-out collective action regime that was established by the Consumer Rights Act of 2015—a regime for which Alex fought—is the only reason that this claim is legitimate. We are eager to collaborate with Alex and see that the regime’s objectives of defending and compensating consumers are met.’
Woodsford, an investment company that finances legal actions in exchange for a portion of the winnings, is supporting the case. The organization is ‘committed to calling large business to account when corporate malfeasance causes loss to consumers and other stakeholders,’ according to Steven Friel, the company’s chief executive. According to Friel, Woodsford has also supported British class actions against shipping corporations accused of inflating the cost of importing vehicles and train companies accused of overcharging.
Sony and PlayStation Leading the Gaming Industry
Looking at the details in this case the question arises: What made it possible for Sony to take advantage of consumers over the past year? The answer is complex, and a number of factors need to be considered to understand the case.
As Neill explained, gaming has become the spearhead of the entertainment industry in the UK. However, almost all other countries have experienced the same phenomenon. Video games took over the world in a matter of years, providing entertainment, community, connection and relaxation for those who play. This was only enhanced by the pandemic, as during the lockdowns many who were confined to their homes for extended periods of time found comfort in playing videogames. Online gaming in fact connects users, creates communities and new friendships that would have not possible without it.
With the rise of gaming, major companies such as Sony and Microsoft (the two biggest rivals) started to gain more and more traction. Both Sony’s Playstation and Microsoft’s Xbox have started to create video games that are exclusive to their respective platforms. With these games only being available for purchase from their respective stores, prices skyrocketed, as there was no competition in sight. Sony made huge profits as a result. Two of its most successful titles in the past years, Last of Us and Uncharted generated a billion dollars in revenue.
With these companies controlling a large share of the market, malpractice and overpricing games is almost unsurprising. But with the UK lawsuit, things may start to change, as many countries could emulate the Brits and launch their own actions, which could finally rein in the greed of large technology corporations.