"...Is Sony's new PlayStation 2 a video game player or a computer? It's more than just a marketing question: The answer is costing the Japanese electronics maker millions in import taxes ahead of this week's European launch. The hot new consoles hit the shelves across Europe on Friday after setting off a scramble among early Christmas shoppers in the United States last month.

But the customs office in Britain, where Sony Computer Entertainment Europe is based, rejected that argument and put the PlayStation 2 in the same video games category as the originals.

That means each unit is subject to a duty of 2.2 percent, or roughly $9, when imported for sale in the European Union. Products classified as "digital processing units" - i.e. computers - don't have to pay any import tax. Sony spokeswoman Liz Ashford said Wednesday the company is appealing the decision in London by asking for a departmental review. If that fails, the company may file suit.

EU Commission spokesman Jonathan Todd said the EU established the rules for "computers used basically for games" earlier this year when confronted with Sony rival Sega's similarly souped-up Dreamcast console.

The Playstation 2 decision "is in line with the Commission's classification rules," he said, adding that Sony was free to challenge the ruling in court. In the meantime, Ashford said, Sony is absorbing the cost of the tariffs rather than passing it on to European consumers, who already will pay a hefty premium over U.S. video game addicts.

The same PlayStation 2 that retails for $299 in the United States is priced at 299 pounds ($425) in Britain, 2,990 francs ($385) in France and 869 marks ($375) in Germany..." NULL