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Sony PlayStation faces UK class action lawsuit of up to £5bn

Sony PlayStation is being sued for up to £5bn over allegations that it breached competition law by overcharging millions of its PlayStation customers.

The lawsuit has been lodged by consumer rights expert Alex Neill in the UK’s Competition Appeal Tribunal, which hears antitrust claims, and if successful could see 8.9mn gamers compensated.

Sony PlayStation is accused of abusing its market dominant position to impose unfair terms and conditions on PlayStation game developers and publishers, which resulted in allegedly unfair prices for consumers each time they bought digital games or in-game content from the PlayStation store.

“PlayStation users have lost out due to this unlawful anti-competitive conduct,” the lawsuit claims, adding on a preliminary estimate that customers’ aggregate losses suffered by the 8.9mn proposed members of the class action could be between £0.6bn and £5bn excluding interest.

According to the claim, anyone in the UK who has purchased digital games or add-on content on their console or via the PlayStation store since August 2016 is included in the lawsuit and could be eligible for compensation, said to be between £67 and £562 per person excluding interest.

The lawsuit is the latest collective action to be filed at the Competition Appeal Tribunal, which is experiencing a wave of US-style class actions — antitrust lawsuits filed on behalf of millions of consumers — against large companies such as BT, Apple and Qualcomm.

The CAT is able to hear such claims after the 2015 Consumer Rights Act allowed collective lawsuits to be filed on behalf of consumers and businesses over alleged breaches of competition law. However each individual claim — including the Sony case — must first be certified by the CAT as eligible to proceed to trial.

In recent months, the number of lawsuits filed at the CAT has increased following a landmark Supreme Court ruling in late 2020. This allowed a £10bn lawsuit brought by former financial ombudsman Walter Merricks on behalf of 46.2mn people against payments company Mastercard to proceed.

The increase in cases has been underpinned by cash-rich litigation funders keen to deploy their capital and back collective lawsuits in return for a slice of any compensation.

Most of the class action-style lawsuits are brought on an “opt out” basis — meaning that millions of consumers who have been potentially affected are automatically included in the lawsuit, unless they choose to opt out of it.

The Sony lawsuit, which was filed on Friday, is being backed by Woodsford, a litigation funder. If it is permitted to proceed, Alex Neill, who is represented by law firm Milberg London, would become the class representative in the case.

Neill, who is chief executive of the Resolver Group, a consumer technology organisation, said: “Collective proceedings like this are vital because they provide the opportunity for us to hold large companies to account on behalf of consumers.”

Sony PlayStation has not yet responded to the claim and has been contacted for comment.

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