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New ACCC PlayStation Fight, Do Sony Management Get Our Consumer Laws?

Sony is once again in the cross hairs of Australian authorities this time it’s over their PlayStation marketing which has got them into trouble in the past.

This time the consumer protection regulator the Australian Competition & Consumer Commission has lodged a case with the Federal Court relating to questionable operations and interaction with consumers by the Japanese Company, whose Australian operations appear to be managed out of Singapore and Europe where consumer regulations differ to Australia.

This time the ACCC has targeted Sony Interactive Entertainment Europe Ltd who they claim broke Australian consumer law by telling customers they could not get a refund for faulty PlayStation games, this is the same subsidary of the Sony Corporation that were recently slapped with $3.2M fine by European regulators over questionable PlayStation marketing.

This is also not the first time that Sony has had a falling out with the ACCC over their PlayStation offering.

In the past the ACCC took action against Sony Computer Entertainment in the Federal Court over whether consumers could modify the processor in their gaming consoles to allow them to access overseas games that played on their consoles.

The Federal Court ruled that consumers did have the right as Sony PlayStation owners to have their games consoles ‘chipped’.

“Chipping allowed consumers to modify their PlayStation console to play imported and copied games”, ACCC Chairman, Professor Allan Fels, said at the time.

“Sony Computer Entertainment Australia was unsuccessful in its attempts to have the new anti-circumvention provisions of the Copyright Act 1968 interpreted to outlaw the installation of modification chips which overcome region coding restrictions.

“Australian consumers can now enjoy games legitimately bought overseas, as well as authorized backup copies, by legally having their games consoles chipped”, he said.

The region coding which exists in PlayStation consoles lets Sony to produce and distribute PlayStation games globally according to three mutually exclusive regions. It effectively prevents games produced in one region from being played on a console manufactured for a different region. These regional restrictions can be overcome by the installation of a ‘mod chip’ which allows consumers to use PlayStation games from all regions, irrespective of the region for which the console was produced.

The Sony Corporation has since rolled their Sony Computer Entertainment operation into Sony Australia who also have a chequered history with the regulator.

In the past the ACCC accepted court enforceable undertakings from Sony Australia Limited for alleged false and misleading representations in several Sony handycam sales brochures.

Sony accepted the ACCC’s concerns about its claims concerning the resolution specifications and ‘Night Shot’ function.

The company agreed to find out who may had relied on the representations in the brochures when buying Sony handycams and to compensate them.

The company also agreed to conduct an independent review of its trade practices compliance program.

In 2018 Sony Australia reported a 2018 after tax profit of AU$5.5 million on revenues of AU$492 million to March 31, 2018.

Profit before tax for the year was AU$8.2 million, with the company paying an income tax expense of AU$2.7 million, up from the AU$577,000 in tax paid a year prior. Deferred tax assets were listed as AU$10.9 million.

Today Sony Australia who are based in North Sydney, sell consumer electronics, mobile, gaming, movies, music, network services, financial services, and professional technology services.

Last year they pulled out of the mobile phone market in Australia after consumers rejected their smartphone offerings. The division at the time was losing money.

Sony Overseas Holdings BV is the immediate parent entity of Sony Australia and the ultimate parent of the company is Sony Corporation registered in Japan.

As global conglomerate their local subsidiary has faced the wrath of several Australian authorities including the ACCC and the ATO.

Overseas Sony haven’t been without their controversy, especially with their whole stance on cross play (which has since been rescinded).

This year the Italian Antitrust organization slapped Sony with a whopping A$3.2M fine over the sale of PS4s.

The Italian Authority for Communications Guarantees (AGCOM) believe that Sony didn’t make it clear enough that PlayStation Plus is a requirement for online play, and that lack of information for consumers on their packaging undercuts the true cost of the PS4.

AGCOM argued that the need for PlayStation Plus for online is not visibly apparent in either the packaging or through the PlayStation Store.

In Australia Sony Australia has in the past been hit with a $53 million bill – $32 million for back tax and $21 million in penalties and interest after an investigation into transfer pricing by the ACCC.

Shortly after the ruling CEO Carl Rose who last year quit Samsung as the Vice President of Consumer operations, quit the Company along with the Chief Financial Officer and director Nicholas Foster.

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