Sony recently attempted to settle one of its class-action lawsuits through an out-of-court settlement that would have involved the company paying out $7.8 million to the plaintiffs. According to Reuters, the settlement was stopped by US District Judge Araceli Martínez-Olguín in a ruling last week. Sony’s plans for the settlement involved giving out the money in the form of PlayStation Store wallet balance to all of the plaintiffs of the class-action lawsuit.
For context, the class-action lawsuit alleges that Sony has unfair pricing for digital copies of its games, with the plaintiffs saying that the company has been overcharging its audience. In their ruling, Judge Martínez-Olguín said that she had not been convinced that the settlement was adequate, describing Sony’s attempted settlement as a “coupon settlement”.
Neither Sony nor lead attorney for the plaintiffs, Michael Buchman, have commented on the ruling yet. Judge Martínez-Olguín has notified the consumers that are part of the class-action lawsuit that they can file a revised proposal for the settlement.
It is worth noting that the crux of the lawsuit revolves around Sony having stopped retailers like GameStop from selling download codes for games on its consoles since 2019. According to the lawsuit, this has allowed Sony to capture a bit of a monopoly on the digital games market.
For its part, Sony has stated that its attempt at a settlement came down to the fact that the company was trying to avoid the expense and distraction that can come up from litigation. Judge Martínez-Olguín said that settlement proposals need to show how the “value and structure of this settlement remain defensible.”
Interestingly, Sony is also facing a class-action lawsuit in the Netherlands. Similar to this lawsuit, the EU-based one, headed up by Dutch foundation Mass Damage & Consumer, revolves around Sony’s pricing practices for its various PlayStation outings, including hardware and games.
“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 lawsuit by Mass Damage & Consumer also brings up the fact that Sony forces third-party publishers and developers to only sell games through the PlayStation Store. The lawsuit announcement noted that this came down to the fact that Sony is in a dominant position in the market, and has led to damages to the Dutch economy to the 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.”
More details about this lawsuit will likely become clear as it properly commences later in the year.
