Sony is now the subject of a class-action lawsuit in the Netherlands. The lawsuit, being headed up by Dutch foundation Mass Damage & Consumer, revolves around Sony’s pricing practices for PlayStation products. According to the foundation, Sony has been taking advantage of its dominant position in the console market for the last ten years by pricing its hardware and software too high.
“Many people notice that since the latest PS5 generation, they are increasingly being pushed towards ‘digital-only’ consoles,” said Mass Damage & Consumer foundation chairman Lucia Melcherts (via Google Translate). “These consoles work exclusively with digital games instead of physical discs. However, economic research has shown that consumers pay an average of 47% more for those digital versions than for the exact same game on a physical disc, while the distribution costs for Sony are lower.”
The foundation describes PlayStation pricing as being subject to a ‘Sony tax’, since digital copies of games sold on the console can only be done so through the PlayStation Store. This, the foundation notes, marks a monopoly on Sony’s part, and prices for games on the platform are being artificially inflated.
“The fact that Sony dares to go up by tens of percent without any quid pro quo is telling for what the proportions are,” said Melcherts. “Sony is the only digital content provider on the world’s most popular game console. Of all Dutch people who have a game console at home, more than 80% have a PlayStation. It can now afford to make decisions without having to worry much about what competitors, developers or consumers are doing.”
As part of its announcement, the foundation notes that Sony is operating its PlayStation business as a closed ecosystem, forcing third-party publishers and developers to only sell their games through the PlayStation store. According to the foundation, Sony has been able to do this largely thanks to its position in the market, and is able to make twice as much of a profit margin on digital copies of games rather than physical copies. The foundation notes that this has led to damages to the Dutch economy to tue tune of around EUR 435 million since 2013.
“At the same time, Sony deprives developers of their commercial freedom of movement,” wrote the foundation in its announcement. “Third-party developers and publishers are contractually obliged to sell their titles exclusively through the PlayStation Store. They also have to give Sony the final say on the price for which their own titles will be placed in the digital shop window. Developers thus lose their freedom to set their own price, but also their negotiating position as a commercial party.”
The foundation has noted that the first hearing for this class action lawsuit may take place later this year, and will fall under the jurisdiction of the Dutch court. During this hearing, the admissibility of the foundation is also slated to be discussed.
Sony hasn’t yet made any comments about this announcement. It is worth noting that, considering the nature of such lawsuits, the company will likely only make comments as we get closer to the date of the first hearing.
