Congress accuses Sony of ‘Anti-Competitive Tactics' against Xbox in Japan

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Eleven members of U.S. Congress have signed letters raising concerns of “anti-competitive tactics” purportedly being used by Sony to gain an advantage in the Japanese video game market over its primary competitor Microsoft.

The two letters, which were signed by members representing both major U.S. political parties and obtained by Axios, were addressed to Ambassador Katherine Tai and U.S. Secretary of Commerce Gina Raimondo.

“Today, we write to bring to your attention the imbalanced Japanese video game market, which we are concerned may be a result of a discriminatory trade practice that could violate the spirit of the U.S.-Japan Digital Trade Agreement,” read one letter.

The statement noted that Microsoft had obtained a “negligible” 2% share of the high-end console market since it began selling in Japan in 2002. The lawmakers suggest that the 20-year failure to make inroads resulted in part from Sony’s strategy of “systematically negotiating” to make popular third-party games PlayStation exclusive, and paying to keep content off Microsoft consoles.

“Our understanding is that the Japanese government tolerates a range of exclusionary conduct by their domestic companies that may violate Japan’s antitrust laws, and that this inaction by the Japanese government harms the ability of U.S. companies to compete in the country,” continued the letter.

According to a second letter signed by members from the state of Washington - which happens to play host to Microsoft’s headquarters - such practices could undermine the U.S.-Japan Digital Trade Agreement. This agreement commits Japan to providing “non-discriminatory treatment to U.S. digital products…such as console games."

Both letters - which used strikingly similar language - asked the U.S. Trade Representative to “seek consultation with Japan to address the issue," and to “identify additional barriers posed to American companies in accessing the Japanese gaming market."

“Sony’s anti-competitive tactics deserve discussion, and we welcome further investigation to ensure a level playing field in the video game industry,” said Microsoft spokesperson David Cuddy in a statement to Axios. However, the company would not reveal the extent to which it had masterminded the letters.

The calls to action come hours after the Japan Fair Trade Commission announced that it would not dispute Microsoft’s acquisition of Activision Blizzard - a deal that PlayStation has been openly protesting since it was first announced in January 2022.

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