Sony has a “monopoly” and engages in “unfair trade practices” when selling games and consoles in Japan, Members of Congress tell the Biden administration.
The competition between Sony and Microsoft is being discussed at the highest levels of power in the United States according to a report on Axios.
Several members of Congress have raised concerns with President Joe Biden’s administration that Sony has a “monopoly” on the Japanese games market, and that it engages in “unfair trade practices.”
In one of two letters written to US Trade Representative Katherine Tai, several member of Congress wrote the following:
“Japan allows foreign gaming companies to sell to its market, but US companies have never gained a foothold. Microsoft debuted its Xbox in Japan in 2002, but despite 20 years of investment, still has a negligible two percent share in the high-end console market.”
The letter goes on to argue that Sony keeps this hold over the Japanese market by paying third-party publishers “not to make their content available on Xbox and systematically negotiates exclusivity arrangements that keep the most popular games in Japan off Xbox.”
The members of Congress then argue that the “monopoly” contravenes a US-Japan trade agreement over “digitally encoded products like console games.”
According to Axios, Katherine Ta told Senator Maria Cantwell last Thursday that the situation would be looked into. Whether the argument will get much further than a pair of letters remains to be seen.
The accusations of a Sony monopoly have arrived as Microsoft’s proposed £50.5 billion deal to acquire Activision Blizzard comes under its own scrutiny. Last year, the UK’s Competition and Markets Authority (CMA) launched an investigation into Microsoft’s deal, citing fears that it could result in “a substantial lessening of competition” as well as potentially higher prices and less innovation.
On 24 March, however, the CMA softened its stance, stating that after closer inspection, it concluded that “the merger will not result in a substantial lessening of competition. A final decision is expected from CMA on 26 April.
In the wake of CMA’s statement, an analyst at Citigroup raised the probability of the Microsoft-Activision deal being a success from 50 percent to 70 percent. There are still competitors who object to the deal, though – not least Sony.
As Axios points out, Microsoft hasn’t said whether it was partly involved in the recent accusations of a Sony monopoly, though a spokesperson for Microsoft, David Cuddy, told the outlet, “Sony’s anti-competitive tactics deserve discussion, and we welcome further investigation to ensure a level playing field in the video game industry.”
More news on this as it comes in.
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