11 Members Of Congress Take Aim At Sony For Unfair Xbox Competition In Japan

A group of 11 U.S. Congress members is urging the Biden Administration to launch an investigation into Sony (NYSE: SONY), alleging that the company's business practices in Japan are negatively affecting the performance of Microsoft Corp's (NASDAQ: MSFT) Xbox and other American companies in the Japanese gaming market.

The Congress members expressed concerns that Sony's conduct may be violating U.S.-Japan agreements, as per Axios. These concerns were made public on Thursday when Sen. Maria Cantwell (D-WA) questioned U.S. Trade Representative Katherine Tai about the issue during a trade hearing. Additionally, 10 members of the House sent letters to Tai and Commerce Secretary Gina Raimondo, urging them to take action.

See also: Microsoft Says 10 Years 'Sufficient' For Sony To Develop Alternatives To 'Call Of Duty'

“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 of the letters says.

“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.”

For years, Sony has held a significant edge over Xbox in the Japanese gaming market. Despite occasionally securing exclusive game titles, Sony's dominance has not made it a simple binary competition, with Nintendo (OTC: NTDOY) taking the lead and leaving Sony and Microsoft trailing behind.

Coincidentally, this pressure on Sony has coincided with the company's own campaign to urge antitrust regulators to block Microsoft's proposed acquisition of Activision-Blizzard (NASDAQ: ATVI) for $68.7 billion.

David Cuddy, a Microsoft spokesperson, told Axios that "Sony's anti-competitive tactics deserve discussion, and we welcome further investigation to ensure a level playing field in the video game industry."

Although it is not clear how much Microsoft was involved in pushing for this investigation, its government affairs team has reportedly discussed the matter with members of Congress.

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Photo: Miguel Lagoa and Tony albelton on Shutterstock