5 ms·

"Sony's desire to impede such growth has prevented Microsoft from expanding Game Pass. To stop content creators from adding to Game Pass and other rival subscri

"Sony's desire to impede such growth has prevented Microsoft from expanding Game Pass. To stop content creators from adding to Game Pass and other rival subscription services, Sony pays for 'blocking rights.'" "These kinds of platform agreements are common in the games industry, and in documents made public as part of the Epic vs. Apple lawsuit last year, PlayStation was even mentioned as blocking the appearance of third-party games on Game Pass." How are "blocking rights" legal? Don't they violate anti-trust / competition laws?

EMIRELADERO 4y ago
I don't think it is per se. Exclusive dealing is a common practice in many sectors. Circumstances can make it illegal, however.
kahrl 4y ago
Probably, but do laws actually matter in white-collar America? As long as the right groups get the right cut, the system will continue.
- deleted 4y ago
  [deleted]
- EMIRELADERO 4y ago
  Yes, laws do matter. Were it otherwise civil courts would have lots of free time. The legal system isn't known for being the corruption oasis that movies make it out to be.
  - Judgmentality 4y ago
    > Were it otherwise civil courts would have lots of free time. Laws don't have to matter for you to waste a court's time. In fact dragging out court cases is a common legal tactic. > The legal system isn't known for being the corruption oasis that movies make it out to be. Your experience differs from mine. It also differs from most lawyers I know. Lawyers aren't famous for drinking heavily because they think they're making the world a better place. Why do you think the court system works? What country do you live in?
rexf 4y ago
I don't see a problem with Sony (or MS/Nintendo/Apple/etc) paying game developers to keep their games exclusive to a platform. Game creators make decisions on where to put their games and how to monetize. Epic Games is notorious for giving "free games" where consumers get the game for free, but EG is paying the publisher/developer behind the scenes. So the game creators are getting paid.
blargey 4y ago
In the videogames industry, it’s fundamentally the same category of competition (or stifling thereof) as an acquisition. When Sony or Microsoft acquire game studios or publishers, both the goal and method is the same - giving their platform an advantage by paying a lump sum for control over the target platforms and storefronts of one or more games. So it’s presumably also a case-by-case thing, like other big acquisitions / cumulative patterns of acquisitions. So far, the industry seems to be “healthy enough” in spite of these sorts of deals. The big storefront/console competitors that are attacking each other are all huge and evenly matched, so none of them can exert this sort of control over anywhere near a majority of the market.
ineedasername 4y ago
>How are "blocking rights" legal? Don't they violate anti-trust / competition laws? Unfortunately it doesn't seem like it. It's not uncommon in the pharmaceutical industry either: When a drug patent expires the company will sometimes pay generic manufacturers to not manufacture the drug for a period of time.
- paulryanrogers 4y ago
  > When a drug patent expires the company will sometimes pay generic manufacturers to not manufacture the drug for a period of time. Which seems like a clear and direct consumer harm. So isn't that illegal, even under the strictest definition?
  - dannyw 4y ago
    Welcome to reality: many corporations break a lot of laws, few are prosecuted.
    - nl 4y ago
      Actually lots are prosecuted: https://www.ftc.gov/news-events/press-releases/terms/935?page=0 https://www.ftc.gov/news-events/press-releases/terms/935?pag...
  - nl 4y ago
    Yes, they often are found illegal by courts: >Since 2001, the FTC has filed a number of lawsuits to stop these deals, and it supports legislation to end such “pay-for-delay” settlements.[1] The FTC lists 4 cases since 2019, but there seems to have been a bunch more prior to 2019 that only have press releases[2] [1] https://www.ftc.gov/news-events/topics/competition-enforcement/pay-delay https://www.ftc.gov/news-events/topics/competition-enforceme... [2] https://www.ftc.gov/news-events/press-releases/terms/935 https://www.ftc.gov/news-events/press-releases/terms/935
kmeisthax 4y ago
Yes, they do violate antitrust. But there are two problems with enforcement: 1. The arrangement in question relates to trade of copyrighted works; which means that any antitrust lawsuit has to jump over the hurdle of not restraining the copyright monopoly. Separability of copyright and exclusive licensing are also considered to be well-established components of the copyright monopoly. 2. The consumer welfare standard is so high a bar to antitrust enforcement that a lot of clearly illegal behavior is never prosecuted. That last one deserves more explanation. In the 1980s a bunch of federal judges decided to repeal US antitrust law from the bench. They argued - with scant evidence - that antitrust action had to prove that consumers were harmed by monopolistic action. This is the exact same argument Apple and console vendors use to justify locking down their products; that it actually benefits consumers to have to buy their software from sources authorized by the hardware manufacturer. In practice, there is no monopoly that does not improve consumer welfare. Monopolies are the most stable business arrangement and can bully the rest of the economy into doing what the customer wants. The whole point of antitrust is that we don't want to live under privately-owned government, not that avocados could be 2 cents cheaper.
- jfim 4y ago
  Are they really a violation of antitrust? They're not really different from exclusive supplier relationships or exclusivity deals in other industries. As you point out, it's pretty accepted in the copyright industry to have exclusivity deals. If I want to get Katy Perry's album, then I buy the Capitol records one, I can't get it from Sony. Or I can only stream on services where that artist is available, so if it's not on Tidal, then tough luck for users of that service.
  - Forgeties79 4y ago
    Music is a little different because you don’t need proprietary hardware in order to listen to music. Everything plays an MP3. A CD is a CD and all CD players play CD’s. With console video games, you can’t just pop the game disc into any disc tray that plays games. You can’t run your downloaded Xbox game on the PlayStation. The thing you licensed (since we don’t own them technically) is tied to proprietary hardware. Imagine if you had to own a Mac in order to listen to your music you bought on iTunes/Apple Music
breakingcups 4y ago
Amazon does it for their K&P / Kindle Unlimited offering to authors. If you want your book to be available in this program (and you do want it because it accounts for a huge chunk of your income on Amazon, depending on genre) you need to agree to not have your book be available anywhere else. Not on Apple, not in Barnes and Noble, nowhere.
- ChadNauseam 4y ago
  I think the exclusivity only applies to the eBook versions. I know Will Wight is able to sell hardcover copies of his books on Kickstarter, but mentioned he couldn't give eBook versions because of his Kindle Unlimited deal.
- Nomentatus 4y ago
  This is strictly illegal, but as in so many other cases in which Amazon has used its market power to that extend market power (that's the illegal part); they've never been prosecuted. Merely preventing authors from offering their ebooks at a low price (but still far higher than the cost of delivery) is strictly illegal (given that the kindle has immense ebook market power.) But Amazon does it. Welcome to Bezos-World.
swatcoder 4y ago
Assuming Sony is paying the publisher some fairly negotiated compensation for what they’d have otherwise project earning from GamePass presence, what’s the anti-competitive element? Just that the game is available through some channels and not others? Because that’s normal in retail. There are exclusivity deals everywhere. Or is there some reason to believe Sony is somehow pressuring publishers to take an unfair deal? It’s possible, but I haven’t read about that yet.
nl 4y ago
> Don't they violate anti-trust / competition laws? You can't say "yes" or "no" to this question. Exclusive deals do not automatically violate anti-trust / competition laws. If one of the companies involved has been found to have a monopoly then it is more likely they will. From the Justice Dept on the Sherman Act: Exclusive dealing is frequently pro-competitive, as when it enables manufacturers and retailers to overcome free-rider issues misaligning the incentives for these vertically-related firms to satisfy the demands of consumers most efficiently. For example, a manufacturer may be unwilling to train its distributors optimally if distributors can take that training and use it to sell products of the manufacturer's rivals. Other benefits can occur as well, as when an exclusivity arrangement assures a customer of a steady stream of a necessary input. But exclusive dealing also can be anticompetitive in some circumstances. For example, exclusive dealing may allow one manufacturer, in effect, to monopolize efficient distribution services and thereby prevent its rivals from competing effectively. https://www.justice.gov/archives/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-8 https://www.justice.gov/archives/atr/competition-and-monopol... The FTC says this: As discussed in the Fact Sheets on Dealings in the Supply Chain, exclusive contracts between manufacturers and suppliers, or between manufacturers and dealers, are generally lawful because they improve competition among the brands of different manufacturers (interbrand competition). However, when the firm using exclusive contracts is a monopolist, the focus shifts to whether those contracts impede efforts of new firms to break into the market or of smaller existing firms to expand their presence. The monopolist might try to impede the entry or expansion of new competitors because that competition would erode its market position. The antitrust laws condemn certain actions of a monopolist that keep rivals out of the market or prevent new products from reaching consumers. Sony has never been found to have a monopoly on gaming (and no a "monopoly on Playstation gaming is not the same thing").
- ThatPlayer 4y ago
  Monopolist does not mean actual monopoly though. Also from the FTC: Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/advice-guidance/competition-guidance/gui...
stodor89 4y ago
> How are "blocking rights" legal? Probably aren't. Gamedev is the wild west of software.
- ChuckNorris89 4y ago
  Not really. Contracts and agreements are a big thing for valuable IPs.

EMIRELADERO 4y ago

I don't think it is per se. Exclusive dealing is a common practice in many sectors. Circumstances can make it illegal, however.

kahrl 4y ago

Probably, but do laws actually matter in white-collar America? As long as the right groups get the right cut, the system will continue.

deleted 4y ago
[deleted]
EMIRELADERO 4y ago
Yes, laws do matter. Were it otherwise civil courts would have lots of free time. The legal system isn't known for being the corruption oasis that movies make it out to be.
- Judgmentality 4y ago
  > Were it otherwise civil courts would have lots of free time. Laws don't have to matter for you to waste a court's time. In fact dragging out court cases is a common legal tactic. > The legal system isn't known for being the corruption oasis that movies make it out to be. Your experience differs from mine. It also differs from most lawyers I know. Lawyers aren't famous for drinking heavily because they think they're making the world a better place. Why do you think the court system works? What country do you live in?

rexf 4y ago

I don't see a problem with Sony (or MS/Nintendo/Apple/etc) paying game developers to keep their games exclusive to a platform. Game creators make decisions on where to put their games and how to monetize. Epic Games is notorious for giving "free games" where consumers get the game for free, but EG is paying the publisher/developer behind the scenes. So the game creators are getting paid.

blargey 4y ago

In the videogames industry, it’s fundamentally the same category of competition (or stifling thereof) as an acquisition. When Sony or Microsoft acquire game studios or publishers, both the goal and method is the same - giving their platform an advantage by paying a lump sum for control over the target platforms and storefronts of one or more games. So it’s presumably also a case-by-case thing, like other big acquisitions / cumulative patterns of acquisitions. So far, the industry seems to be “healthy enough” in spite of these sorts of deals. The big storefront/console competitors that are attacking each other are all huge and evenly matched, so none of them can exert this sort of control over anywhere near a majority of the market.

ineedasername 4y ago

>How are "blocking rights" legal? Don't they violate anti-trust / competition laws? Unfortunately it doesn't seem like it. It's not uncommon in the pharmaceutical industry either: When a drug patent expires the company will sometimes pay generic manufacturers to not manufacture the drug for a period of time.

paulryanrogers 4y ago
> When a drug patent expires the company will sometimes pay generic manufacturers to not manufacture the drug for a period of time. Which seems like a clear and direct consumer harm. So isn't that illegal, even under the strictest definition?
- dannyw 4y ago
  Welcome to reality: many corporations break a lot of laws, few are prosecuted.
  - nl 4y ago
    Actually lots are prosecuted: https://www.ftc.gov/news-events/press-releases/terms/935?page=0 https://www.ftc.gov/news-events/press-releases/terms/935?pag...
- nl 4y ago
  Yes, they often are found illegal by courts: >Since 2001, the FTC has filed a number of lawsuits to stop these deals, and it supports legislation to end such “pay-for-delay” settlements.[1] The FTC lists 4 cases since 2019, but there seems to have been a bunch more prior to 2019 that only have press releases[2] [1] https://www.ftc.gov/news-events/topics/competition-enforcement/pay-delay https://www.ftc.gov/news-events/topics/competition-enforceme... [2] https://www.ftc.gov/news-events/press-releases/terms/935 https://www.ftc.gov/news-events/press-releases/terms/935

kmeisthax 4y ago

Yes, they do violate antitrust. But there are two problems with enforcement: 1. The arrangement in question relates to trade of copyrighted works; which means that any antitrust lawsuit has to jump over the hurdle of not restraining the copyright monopoly. Separability of copyright and exclusive licensing are also considered to be well-established components of the copyright monopoly. 2. The consumer welfare standard is so high a bar to antitrust enforcement that a lot of clearly illegal behavior is never prosecuted. That last one deserves more explanation. In the 1980s a bunch of federal judges decided to repeal US antitrust law from the bench. They argued - with scant evidence - that antitrust action had to prove that consumers were harmed by monopolistic action. This is the exact same argument Apple and console vendors use to justify locking down their products; that it actually benefits consumers to have to buy their software from sources authorized by the hardware manufacturer. In practice, there is no monopoly that does not improve consumer welfare. Monopolies are the most stable business arrangement and can bully the rest of the economy into doing what the customer wants. The whole point of antitrust is that we don't want to live under privately-owned government, not that avocados could be 2 cents cheaper.

jfim 4y ago
Are they really a violation of antitrust? They're not really different from exclusive supplier relationships or exclusivity deals in other industries. As you point out, it's pretty accepted in the copyright industry to have exclusivity deals. If I want to get Katy Perry's album, then I buy the Capitol records one, I can't get it from Sony. Or I can only stream on services where that artist is available, so if it's not on Tidal, then tough luck for users of that service.
- Forgeties79 4y ago
  Music is a little different because you don’t need proprietary hardware in order to listen to music. Everything plays an MP3. A CD is a CD and all CD players play CD’s. With console video games, you can’t just pop the game disc into any disc tray that plays games. You can’t run your downloaded Xbox game on the PlayStation. The thing you licensed (since we don’t own them technically) is tied to proprietary hardware. Imagine if you had to own a Mac in order to listen to your music you bought on iTunes/Apple Music

breakingcups 4y ago

Amazon does it for their K&P / Kindle Unlimited offering to authors. If you want your book to be available in this program (and you do want it because it accounts for a huge chunk of your income on Amazon, depending on genre) you need to agree to not have your book be available anywhere else. Not on Apple, not in Barnes and Noble, nowhere.

ChadNauseam 4y ago
I think the exclusivity only applies to the eBook versions. I know Will Wight is able to sell hardcover copies of his books on Kickstarter, but mentioned he couldn't give eBook versions because of his Kindle Unlimited deal.
Nomentatus 4y ago
This is strictly illegal, but as in so many other cases in which Amazon has used its market power to that extend market power (that's the illegal part); they've never been prosecuted. Merely preventing authors from offering their ebooks at a low price (but still far higher than the cost of delivery) is strictly illegal (given that the kindle has immense ebook market power.) But Amazon does it. Welcome to Bezos-World.

swatcoder 4y ago

Assuming Sony is paying the publisher some fairly negotiated compensation for what they’d have otherwise project earning from GamePass presence, what’s the anti-competitive element? Just that the game is available through some channels and not others? Because that’s normal in retail. There are exclusivity deals everywhere. Or is there some reason to believe Sony is somehow pressuring publishers to take an unfair deal? It’s possible, but I haven’t read about that yet.

nl 4y ago

> Don't they violate anti-trust / competition laws? You can't say "yes" or "no" to this question. Exclusive deals do not automatically violate anti-trust / competition laws. If one of the companies involved has been found to have a monopoly then it is more likely they will. From the Justice Dept on the Sherman Act: Exclusive dealing is frequently pro-competitive, as when it enables manufacturers and retailers to overcome free-rider issues misaligning the incentives for these vertically-related firms to satisfy the demands of consumers most efficiently. For example, a manufacturer may be unwilling to train its distributors optimally if distributors can take that training and use it to sell products of the manufacturer's rivals. Other benefits can occur as well, as when an exclusivity arrangement assures a customer of a steady stream of a necessary input. But exclusive dealing also can be anticompetitive in some circumstances. For example, exclusive dealing may allow one manufacturer, in effect, to monopolize efficient distribution services and thereby prevent its rivals from competing effectively. https://www.justice.gov/archives/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-8 https://www.justice.gov/archives/atr/competition-and-monopol... The FTC says this: As discussed in the Fact Sheets on Dealings in the Supply Chain, exclusive contracts between manufacturers and suppliers, or between manufacturers and dealers, are generally lawful because they improve competition among the brands of different manufacturers (interbrand competition). However, when the firm using exclusive contracts is a monopolist, the focus shifts to whether those contracts impede efforts of new firms to break into the market or of smaller existing firms to expand their presence. The monopolist might try to impede the entry or expansion of new competitors because that competition would erode its market position. The antitrust laws condemn certain actions of a monopolist that keep rivals out of the market or prevent new products from reaching consumers. Sony has never been found to have a monopoly on gaming (and no a "monopoly on Playstation gaming is not the same thing").

ThatPlayer 4y ago
Monopolist does not mean actual monopoly though. Also from the FTC: Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/advice-guidance/competition-guidance/gui...

stodor89 4y ago

> How are "blocking rights" legal? Probably aren't. Gamedev is the wild west of software.

ChuckNorris89 4y ago
Not really. Contracts and agreements are a big thing for valuable IPs.