By Mike Scarcella

Dec 16 (Reuters) - Sony has agreed to settle a federal lawsuit in San Francisco that claimed restrictions on digital game sales for its PlayStation console caused customers to overpay for games.

The entertainment giant agreed to distribute $7.85 million in electronic credits to PlayStation customers to end the proposed class action, according to a preliminary settlement filed on Friday night.

The settlement requires approval from U.S. District Judge Araceli Martínez-Olguín. Sony and lawyers for both sides in the case did not immediately respond to requests for comment.

The plaintiffs, who estimated the class size at more than 4.4 million individuals, sued Sony after its 2019 move to bar retailers such as Amazon, Best Buy and GameStop from offering game-specific vouchers. The lawsuit accused Sony of illegally reducing competition for digital PlayStation games.

Sony in a court filing said it was settling to avoid the further expense and distraction of continued litigation. The company denied any wrongdoing.

The settlement period covers eligible purchases made between April 2019 and December 2023, according to the plaintiffs’ court filing. Class members with deactivated PlayStation accounts who cannot receive credits will be compensated by another method, Friday's filing said.

The plaintiffs’ lawyers said they had invested about 13,700 hours in the litigation, which began in 2021.

They said they will ask the court to award them up to about 33% of the settlement for legal fees, or about $2.61 million.

The case is Agustin Caccuri et al v. Sony Interactive Entertainment, U.S. District Court, Northern District of California, No. 3:21-cv-03361-AMO.

For plaintiffs: Michael Buchman of Motley Rice

For defendant: Meredith Dearborn and Andrew Finch of Paul, Weiss, Rifkind, Wharton & Garrison

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