GameStop’s practice of removing a competitor’s coupons from new copies of videogames could land the retailer in legal hot water.
On Tuesday, GameStop’s corporate office sent a memo to employees, instructing them to open copies of new Square Enix game Deus Ex: Human Revolution and yank out the included coupon codes that let buyers play the title for free on OnLive, a digital distribution service and one of GameStop’s prime competitors. Employees were then told to sell the copies as if they were brand new.
GameStop representative Beth Sharum confirmed the policy, telling Wired.com in an e-mail that, “Square Enix packed the competitor’s coupon with our [Deus Ex: Human Revolution] product without our prior knowledge and we did pull these coupons.”
Though the new policy might seem outrageous to GameStop customers, lawyer and game industry analyst Mark Methenitis said it might not violate consumers’ rights, as OnLive coupons are not an “essential function” of the new game. However, Square Enix and OnLive “may have a claim against GameStop in terms of tortious interference,” Methenitis said in a phone interview with Wired.com.
Tortious interference litigation results when one party accuses another of intentionally damaging their business contracts or relationships. By removing OnLive’s coupon from copies of Deus Ex: Human Revolution, GameStop might have violated United States economic tort law.
Methenitis added that customers might be able to pursue legal action against GameStop for deceptive trade practices or fraudulent advertising, though he doesn’t think they’d have much of a case, as nothing on the game’s packaging suggests that it includes the OnLive code. He also said GameStop could be in the right if Square Enix had violated terms of a pre-existing agreement with the retailer.
“Existing contracts between GameStop and Square may have barred this kind of promotion, and so GameStop may actually be justified in their action if Square is in breach of some promotion/marketing agreement,” he said. GameStop did not immediately reply to Wired.com’s request for information on any pre-existing agreements with Square Enix.
When contacted by e-mail by Wired.com, a representative for Square Enix said, “We’re currently looking into it and have no comment for the time being.” A representative for OnLive also said the company had no comment at this time.
This isn’t the first time GameStop’s practices, particularly with regards to opened games that are then sold as new, have ruffled feathers. The company has been accused of deceptive practices several times over the past few years, particularly revolving around its “rental” program, which allows store employees to borrow inventoried games for up to four days. Many employees have reported playing new copies of games, then selling them to customers as if they had not been used.
The company has been hit by a class-action lawsuit over its practices.
Wired.com contacted several current and former GameStop employees over the past few months, with some confirming that their stores sold used copies of games as if they were new. Other employees reported that their stores were very strict about not allowing the “rental” of new copies of games.
“We are able to rent these games the day they come out,” said GameStop employee James Goshow in an e-mail to Wired.com. “We act like nothing has happened, like it wasn’t sitting in my Xbox for the last two weeks, like I didn’t drop it on the floor. When customers ask, ‘Why is my game not wrapped?’ we just reply, ‘Well, we have to put some of the new cases out on the floor, but that is new — don’t worry.’”
Some of GameStop’s policies might have violated Federal Trade Commission policy, though Methenitis said customers have not been successful in winning lawsuits against the retailer for selling used games as if they were new.
“The FTC Act prohibits unfair and deceptive business practices,” an FTC representative told Wired.com. “So if a company misrepresents that a product is new and doesn’t make adequate disclosures that it has been open or used, then that could be considered deceptive.”
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