Sony is facing a £5bn class action lawsuit for allegedly overcharging consumers
Consumers claim they've been "ripped off" by Sony with overpriced games and in-game purchases
➡️ The Shortcut Skinny
😲 Sony is being sued for £5bn by nine million claimants in the UK
☝️ The legal claim accuses Sony of overpricing its games and in-game purchases
💰 Sony allegedly “ripped people off” by charging a 30% commission on digital content
👩⚖️ If the lawsuit is successful, Sony could have to pay each member of the lawsuit between £67 and £562, excluding interest
🧑🏻🤝🧑🏾Anyone who has made a digital purchase since August 19, 2016, could be entitled to compensation
Sony is facing a £5bn class action lawsuit that accuses the company of overpricing digital content and in-game purchases sold through the PlayStation Store.
As reported by Sky News, the legal claim includes almost nine million claimants and has been filed against Sony by consumer rights champion Alex Neill. Neill is the ex-managing director of Which, a not-for-profit organization that serves to advise and protect consumers. She is now the CEO of Resolver, a free, independent issue resolution service.
Neill’s collective action legal claim against Sony argues that the Japanese company breached competition law by unlawfully overcharging PlayStation customers. The claim says Sony has imposed unfair terms and conditions on PlayStation game developers and publishers, resulting in unfair prices for consumers who buy digital games or in-game purchases through the PlayStation Store.
By charging a 30% commission on digital content, Sony is “ripping people off” according to the claim, meaning UK consumers have been overcharged by as much as £5 billion over the last six years.
If the claim is successful, the estimated damages each member of the lawsuit receives is between £67 and £562, excluding interest.
In a press release on the ‘PlayStation You Owe Us’ website, Neill says:
“The game is up for Sony PlayStation. 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 are 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.”
Alex Neill is advised by the law firm Milberg London LLP. The partner leading the case is Natasha Pearman, who says:
“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.”
Consumers who might be affected don’t need to do anything to be included in the claim, which includes anyone who has made a digital purchase through the PlayStation Store since August 19, 2016. Class members will not have to pay any of the costs of the action themselves, according to Woodsford, a leading access to justice and litigation finance business funding the action.
Will the claim be successful?
The main crux of the class action lawsuit against Sony is that the company charges a 30% commission on every digital purchase and has a “near monopoly on the sale of digital games and add-on content through its control of the PlayStation Store.”
The prices, according to Neill, are “out of all proportion to the costs of Sony providing these services to its customers,” which “results in excessive and unfair prices to consumers.”
We know that Microsoft, Steam, and Apple also take a 30% cut of every digital purchase, which might make Neill’s claim a difficult one to win.
Epic and Apple recently went to court over this exact issue, with Epic wanting to circumvent Apple’s 30% tax by selling Fortnite content outside of the App Store (Epic only takes a 12% cut on digital purchases). It’s hard to declare either company an overall winner, but Epic did win an injunction in September 2021 that forced Apple to change its ways. The court said:
“Apple Inc. [...] are hereby permanently restrained and enjoined from prohibiting developers from (i) including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.”
However, Apple was not deemed to have a monopoly, which might indicate that Neill’s lawsuit against PlayStation will be hard to win.
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