The Northern California District Court has ruled (opens in new tab) that GameStop stores throughout the state must place warning labels on used games with content locked behind Online Passes or similar schemes. The company will also pay restitution to purchasers of second-hand titles affected by such restrictions.
The news comes after Senior District Judge Thelton E. Henderson approved a settlement between the company and legal firm Baron & Budd, who brought a class-action suit against GameStop for its second-hand practices. B&B alleged that the company was buying up used games at low prices then marking-up the titles to within $5 of their original value – even though Online Passes require customers to pay up to $15 to access some of the games’ content (GameStop also sells Online Passes). B&B says this practice has allowed GameStop to make over $2 billion per year on used game sales alone, without paying royalties to the games’ original publishers or developers.
Under the settlement, GameStop will now have to provide in-store and online warning labels for Online Pass-enabled second-hand games such as SSX and Mass Effect 3. The company will also issue rebates to buyers of such titles in checks and GameStop vouchers. Baron & Budd says it will post instructions for customers who feel they may be eligible for such a rebate on its Facebook page (opens in new tab).
“if GameStop discloses the truth to consumers, it is unlikely that they will be able to continue selling used copies of certain games for only $5 less than the price of a new copy,” says B&B’s Mark Pifko. “In fact, we already know that not long after the lawsuit was filed, GameStop lowered prices for used copies of many of the game titles identified in the lawsuit.”
While the settlement only applies to Californian stores and customers, Baron & Budd says it’s investigating the chain’s practices throughout the US and urges customers affected by the company’s second-hand practices to make contact. B&B’s contact details can be found at the firm’s website (opens in new tab).