Ending Sony’s veto on Xbox Game Pass? This is what the new Regulation 2022/1925 on the digital sector says
Digital services occupy an increasingly important place in the regulation we face. Proof of this is the movements that we have been seeing around for several months Microsoft’s purchase of Activision Blizzard ; from the possibility of being a CMA monopoly to the response of the American Chamber of Commerce suggesting the possibility of non-compliance with European regulations if they continue to block certain operations. This situation could be further complicated by the publication and entry into force of Regulation (EU) 2022/1925 on the digital sector, published on October 12.
1.- What does this Regulation say and why does it affect large companies?
« Article 1
Subject and scope of application
1. The purpose of this Regulation is to contribute to the proper functioning of the internal market by establishing it harmonized rules that guarantee fair and competitive markets to all companies throughout the Union digital sector where there are gatekeepers, for the benefit of professional users and end users .”
This Regulation is an addition to all existing provisions, until today, aimed at regulating and suppressing anti-competitive and anti-consumer practices. And it demands that all operators in the digital sector markets, where there are access guards, can move fairly and equally. And that means?
In order to understand the Regulation, it is necessary to know two basic concepts around which it revolves: basic platform services ” and ” gatekeepers “. Basic Platform Services are included in Article 2.2, including but not limited to online brokerage services, online search engines, video sharing platform services, online social networks, virtual assistants, web browsers, etc. And by “gatekeeper” we mean any company that offers any of these basic platform services. So, for example, the online brokerage service would be YouTube, and the gatekeeper would be Google, the owner of YouTube.
Sony would be affected by the Regulation to the same extent as Microsoft, Google or Amazon.
And you will think well, therefore Sony is not affected, as it does not fall under any of the definitions above. «. But the truth is that Sony, although it does not offer the same services as Microsoft, Google, Apple or Amazon, has a core service that falls within the scope of this Regulation: its store. And is it, according to Regulation (EU) 2019/1150 of the European Parliament and of the Council of June 20, 2019 on promoting fairness and transparency for professional users of online intermediary services:
” Online brokerage services covered by this regulation include e-commerce markets , especially collaborative marketplaces involving professional users, online software application services such as application stores, and online social networking services, regardless of the technology used to provide those services. In this sense, Internet mediation services could also be provided through voice-assisted technology’.
Therefore, given that Sony has a store, understood as an “e-commerce marketplace” and that the store is part of the Internet intermediary services, it offers platform services and can be considered a gatekeeper of access.
2.- Sony will no longer veto content coming to Xbox Game Pass. We’ll tell you why.
Having stated that both Sony and Microsoft are covered by Regulation (EU) 2022/1925, let’s get to the heart of the matter: Sony vetoes Xbox Game Pass . As you already know, Sony doesn’t really support the services that Microsoft offers; especially from Xbox Game Pass. Not only did he veto the arrival of certain games in the catalog, as revealed with Resident Evil Village, but the terms of allowing the purchase of Activision Blizzard by Microsoft and the veto of the arrival of Call of Duty for Xbox GamePass were also leaked.
But all that may come to an end. And it is that within the framework of the obligations of admission tutors, which are detailed in Article 5 of Regulation (EU) 2022/1925, the following are distinguished:
That is: the access guardian (Sony) will refrain from applying obligations (veto the arrival of games on Xbox Game Pass, as happened with Resident Evil Village) that prevent professional users (developers) from offering the same products or services to end users (players ) through third-party online intermediary services (Sony Store) or its own online direct sales channel at different prices or terms (exit condition on Xbox Game Pass) than those offered through online gatekeeper intermediary services (Sony Store, not Xbox Game Pass ).
And the ban would also apply to Microsoft, which could not ban e.g Activision Blizzard will decide which Call of Duty will have PS5 exclusive content if you want. It’s also true that this article doesn’t seem to be referring to exclusive games, but to those that are cross-platform and can be released under different conditions on each console.
For now, it remains to be seen how this regulation applies to the member states of the European Union and whether it is accepted by the British or American competition agencies. And in any case, we will have to wait for more details on May 2, 2023, when the Regulation enters into force. But the truth is that in principle this Regulation seems to cut short any possibility of continuing veto games coming to Xbox Game Pass by Sony. You, what do you think?