Sony PlayStation Store Trial: £1.97B Class Action Explained

The class-action lawsuit, branded as “PlayStation You Owe Us“, filed by consumer rights champion Alex Neill against Sony’s PlayStation has finally kicked off in earnest today, with the plaintiff’s legal counsel, Mr Palmer, delivering the opening statement (the proceedings were livestreamed on the Competition Appeal Tribunal‘s official website).

The legal action was filed in 2022 to challenge Sony’s monopoly over the PlayStation Store digital platform, which, according to the plaintiffs, led to higher game prices for consumers. The damage figure sought by the plaintiff has changed, though: it initially stood at $5 billion in 2022 and rose to £6.3 billion in November 2023, when the CAT agreed that the case should go to trial. Now, the damages have been reduced to £1.49 billion, plus 8% interest, for a total of £1.971 billion.

Even so, if the plaintiff won, all PlayStation users domiciled in the UK who, during the relevant period (19 August 2016 to 12 February 2026), made one or more Relevant Purchases (purchases of digital games or add-on content from the PlayStation Store), would be entitled to £100-£162 per affected consumer. It is estimated that approximately 12.2 million PlayStation owners are therefore eligible for this compensation.

The case is fairly straightforward in its essence: Sony has illegally monopolized the digital distribution of games and add-on content on the PlayStation Store, and used that monopoly to overcharge consumers by approximately 20% compared to what prices would have been under competitive conditions.

The mechanism through which this is alleged to have happened is Sony’s Game Developer Publishing Agreement (GDPA), the contract all developers and publishers must sign before distributing anything on PlayStation. Crucially, clause 9.2.1 of the GDPA requires that all digitally delivered products be distributed only through PSN, explicitly prohibiting any alternative digital distribution channel. Simultaneously, clause 15.2.2 gives Sony the sole and exclusive right to set retail prices for all digital content on the store, which it does, at the notorious fixed 30% target margin that has remained unchanged since the platform’s debut. The argument is that the combination of exclusive distribution plus exclusive retail pricing control constitutes an abuse of Sony’s dominant position in the digital distribution aftermarket, in violation of UK and EU competition law.

Sony’s position is that this is a “systems market” in which consumers choose between the PlayStation and Xbox consoles, and that competition between those systems is sufficient to constrain Sony’s conduct. Under this framing, there is no separate digital distribution market; it’s all part of one competitive ecosystem.

The plaintiff’s position counters that the argument fails because of whole-life costing, or, rather, the inability of consumers to engage in it. For a systems market to exist, consumers would need to factor in the total expected lifetime cost of games and add-on content when choosing a console. The plaintiff argues they can’t possibly do this, because future game prices, the length of the console generation, what add-on content they’ll want, and what future pricing structures will look like are all completely unknowable at the point of purchase. This distinguishes game consoles from, say, printers, where businesses can calculate cost per page with reasonable accuracy and genuinely factor in ink costs when making their purchase decisions.

Counsel Palmer then walked the tribunal through a substantial collection of internal Sony documents spanning from 2009 to 2024, painting a picture of a company that was acutely aware of the commercial value of its distribution monopoly and actively worked to defend it.

• Early exclusion of competition (from 2009): Documents showed that publishers and retailers, such as Ubisoft and Electronic Arts, repeatedly requested the ability to sell digital PlayStation content through their own stores or platforms from as early as 2009. Sony consistently refused, delayed, or imposed restrictive conditions on any such requests. Internal communications showed that Sony’s concern was explicitly about maintaining pricing power and margin, not about technical feasibility (which Sony’s own documents conceded was possible throughout).
• Recognition of the threat: A 2019 internal document prepared approximately a year before the PS5’s launch modelled a “worst case scenario” in which digital distribution was opened to competition. It identified price competition, reduced margins, and loss of control over the PlayStation Plus subscription as key threats. The plaintiff framed this as Sony “identifying the roses currently flourishing in its garden” and taking active steps to protect them.
• Control of the cross-platform policy: From around 2018-2019, Sony introduced a limited exception allowing add-on content purchased on other platforms to be accessed on PlayStation, but this cross-commerce exception was carefully circumscribed and explicitly designed, per the documents, not to create genuine competitive pressure on Sony’s digital distribution margins.
• Retail price control: Unlike the physical games market, where Sony has never set retail prices and competes with independent retailers, Sony has complete and sole control over digital retail prices. Publishers agree on a wholesale price, Sony adds its 30% margin, and the resulting retail price is set unilaterally. Sony can also discount games without publisher consent, though evidence suggests it effectively maintains its margin even in promotional periods.
• Comparison with Steam: Sony’s own internal documents from 2023 compared the PlayStation Store unfavourably with Steam on features including personalized recommendations, algorithmic discoverability, and publisher tools, identifying these as persistent shortcomings. The plaintiff used this to argue that Sony’s lack of innovation in the store was itself a consequence of the absence of competitive pressure.

Several of Sony’s anticipated defence arguments were previewed and addressed in the plaintiff’s opening. Sony is expected to argue it could not have been dominant at the inception of the PlayStation 4 because the PS3 was a failure. The plaintiff pre-emptively pushed back on this argument: the PS3 started badly but eventually outsold the Xbox 360 globally (87 vs 84 million units), and any losses Sony incurred were attributable to the high cost of its bespoke Cell processor, the costly inclusion of the brand new Blu-ray technology, and Microsoft’s 12-month head start to the market, none of which reflected a loss of market power. Publishers never really considered abandoning Sony, even during the early PS3 era, and instead worked hard to develop for the platform despite its programming difficulties.

Sony is also expected to emphasize its investment and innovation record. The plaintiff pre-empted this by arguing that while dominance is not prohibited, its abuse is, and that being innovative does not authorize abusive conduct. Furthermore, the plaintiff’s expert (Mr Harmon) argues that console innovation has largely tracked general advances in the wider semiconductor industry rather than reflecting unique Sony R&D, noting that Sony’s own internal documents describe PlayStation and Xbox as having “all but identical product feature sets” across the current and previous generations.

The plaintiff anticipates that Sony will argue that a significant number of consumers own both a PlayStation and an Xbox, which provides a competitive constraint. The plaintiff argued this is unsupported by the evidence, as the proportion of PS5 owners who also own an Xbox in the UK is modest, and even where multihoming exists, it doesn’t impose an immediate and effective constraint because switching ecosystems would require going through several costly steps: buying a new console, repurchasing games, losing a social network and online subscriptions, and accepting the loss of any owned backward compatible content.

Sony argues that publishers have meaningful bargaining power, but the plaintiff countered that publishers cannot credibly threaten to withdraw from PlayStation given its installed base, the high cost of game development, and the low marginal cost of publishing on an additional platform. The counsel also noted that Sony might seek to reframe the entire case as a “refusal to supply” complaint, arguing that because no publisher ever formally requested the exact counterfactual setup the plaintiff describes, there can be no abuse. The plaintiff called this “thoroughly circular“, that is to say, an attempt to use Sony’s own abuse as justification for the abuse itself, since publishers’ requests were shaped by Sony’s entrenched restrictions from the outset.

The plaintiff also outlined a counterfactual world in which Sony never imposed exclusive digital distribution restrictions. In this hypothetical world, from the PS4 generation onwards, alternative digital retailers (publishers, third-party stores, and UK retailers like GAME) could have competed to sell PlayStation digital content. In this world, Sony would still have been able to charge a platform fee and enforce quality standards through its certification process, but would not have been able to maintain a 30% margin and monopoly retail pricing. Using physical game prices as a real-world benchmark for what competitive digital pricing would look like, the plaintiff’s expert concluded that digital prices would have been approximately 20% lower across the relevant period. Hence, the final damage request.

The hearing is expected to run for several weeks, with Sony’s counsel Mr Beard due to present the defence’s opening arguments in the days following. We’ll report again if there are any major developments in this high-profile class-action lawsuit against Sony’s PlayStation.

Meanwhile, another digital platform owner, Valve, was also hit by two lawsuits in the UK: the first one targets Steam’s supposed monopoly, not unlike the lawsuit discussed in this article, and a freshly announced legal action from the Performing Rights Society.

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