According to Reuters, a United States District Court judge from the Northern District of California has rejected a Sony-approved settlement over a PlayStation Store credits class action lawsuit. The plaintiffs claimed that Sony overcharged for digital games distributed through its monopolized PlayStation Store, and Sony agreed to settle the lawsuit by allocating $7.8 million in PlayStation Store credits to millions of PlayStation Network users.
However, the judge denied the settlement for a variety of reasons, including the fact that 'coupon settlements' such as this one are 'generally disfavored'.
The motion fails to include an estimated recovery had the proposed class prevailed on each claim, and it fails to provide any estimate of the discount applied to the claims. Importantly, though the motion acknowledges the potential damages were smaller than initially contemplated, the motion provides no estimated class recovery given that discovery. These shortcomings alone warrant denial of Cendejas’s motion for preliminary approval because it prevents the Court from meaningfully assessing the fairness of the proposed settlement. Any renewed motion for preliminary approval must include a chart setting forth the anticipated breakdown of the $7,850,000 settlement distribution, including amounts estimated for attorney’s fees, service awards, costs, administration expenses, and other amounts to be paid. From the resulting net settlement amount, Cendejas shall provide a ballpark estimate or range of amounts to be distributed to each Settlement Class Member.
Moreover, the Settlement calls for Class Members to receive compensation in the form of cash-value PlayStation Network (“PSN”) account credits. The Court views such PSN account credits as settlement coupons, which are generally disfavored. Any renewed motion for preliminary approval must address the propriety of such settlement coupons and whether the value and structure of this settlement remain defensible.
For its part, Sony had actually denied any wrongdoing, but added that it was settling to avoid the further expense and distraction of continued litigation. Following this ruling, it remains unclear whether users will actually see those PlayStation Store credits or not.
A similar lawsuit was filed in the United Kingdom, although the plaintiffs are asking for compensation orders of magnitude greater than the US one.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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