Several members of congress, including both Republicans and Democrats, recently pushed to level the competitive playing field between PlayStation and Xbox in Japan. The politicians are concerned that Sony's business practices in the country have been preventing Microsoft from competing on the console market, potentially in violation of trade agreements.As reported by Axios, Senator Maria Cantwell pressed Trade Representative Katherine Tai on the issue during a trade hearing, ten members of congress later coming forward with two letters addressed to Tai and Commerce Secretary Gina Raimondo, both of which called for action.The first of these two letters, signed by four Republicans, alleges that Sony has a 98 percent share of the “high-end console market” in the country and signs deals to keep hit Japanese games from being released on Xbox, violating antitrust laws on both sides of the Pacific. The letter explains how the “Japanese government’s effective policy of non-prosecution when it comes to Sony appears to be a serious barrier to US exports, with real impacts for Microsoft and the many US game developers and publishers that sell globally but see their earnings in Japan depressed by these practices.”
The second letter, written by six Democrats, covers very similar ground. This points to the US-Japan Digital Trade Agreement, noting how the treaty calls on Japan to provide “non-discriminatory treatment to US digital products,” a clause which of course includes games. Consoles however may not fall under the protection of this particular trade deal.
Sony has held a significant advantage over Microsoft in Japan for several decades. Nintendo naturally dominates the market, but the Switch isn’t considered to be a “high-end console,” at least under the terms of the treaty. The competition between Sony and Microsoft, on the other hand, has always been fierce, even in Japan.
This of course comes in the wake of Sony pressuring antitrust regulators to block the still pending acquisition of Activision Blizzard by Microsoft, a deal worth a staggering $69 billion. Sony has leveled very similar accusations about market access at Microsoft, most notably over Call of Duty. Microsoft spokesperson David Cuddy explained that “Sony’s anti-competitive tactics deserve discussion and we welcome further investigation to ensure a level playing field in the video game industry," but held back from detailing the company's involvement with congress in the mounting trade dispute.