Microsoft and Sony’s rivalry has kicked up a notch. The two console makers have been on opposing sides in Microsoft’s acquisition of game publisher Activision Blizzard, with Sony arguing against the competition. But, in a new development, the US Congress has stepped in to investigate Sony.
Eleven members of the US Congress are asking the government to investigate the world's leading console manufacturer as it claims that Sony’s business practices in Japan are hurting Xbox sales in the country.
According to the report by Axios, the lawmakers raised their concerns to US Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo. The concerns were made public last week during a trade hearing in which Sen. Maria Cantwell called out Sony’s gaming monopoly in an exchange with Tai.
"I'm told that Sony controls a monopoly of 98% of the high-end game market, yet Japan's government has allowed Sony to engage in blatant anti-competitive conduct through exclusive deals and payments to game publishers," Sen. Cantwell said during the Senate Finance Committee hearing. The Democratic Party Senator is referring to the exclusivity deals that Sony has with game developers.
The report also mentions that ten members of US Congress have sent two letters addressed to Trade Rep Tai and Secretary 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," one letter reads. The letter was signed by four Republican members of Congress.
According to the lawmakers, Sony has a 98% share of the high-end console market in the country. The representatives are saying that Sony has signed deals to keep best-selling video games from Japanese developers from the Xbox console. The letter claims that this tactic "may violate Japan’s antitrust laws."
The letter states, "The Japanese government’s effective policy of non-prosecution when it comes to Sony appears to be a serious barrier to U.S. exports, with real impacts for Microsoft and the many U.S. game developers and publishers that sell globally but see their earnings in Japan depressed by these practices."
A separate letter was also sent to Tai and Raimondo by six Democrat lawmakers from Microsoft’s home state of Washington. The letter expresses similar concerns.
The issue raised by US lawmakers also left out Nintendo, which is, far and away, the best-selling console manufacturer in Japan. The clever use of the phrase "high-end consoles" is meant to exclude the Nintendo Switch which has outsold both the PlayStation and Xbox globally.
This latest development in the rivalry between Microsoft and Sony comes on the heels of the US FTC blocking the tech giant’s proposed acquisition of Activision Blizzard. Sony has been the most vocal opposition to the deal which is currently being investigated by the US FTC, UK CMA, and EU Commission.
Microsoft has welcomed the move by US lawmakers. "Sony’s anti-competitive tactics deserve discussion, and we welcome further investigation to ensure a level playing field in the video game industry," Microsoft spokesperson David Cuddy said in a statement to Axios.
Sony has not yet issued a statement on the matter.