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EU charges Valve and 5 game publishers with unfair ‘geo-blocking’
The European Commission charged Valve, the owner of a video distribution platform, and five game publishers on Friday with preventing EU consumers from shopping around within the European Union to find the best deal for the games they offer.
The case is the latest move by EU antitrust regulators against cross-border curbs on online trade, key to what is seen as a major part of economic growth in the 28-country bloc.
The Commission, which oversees competition policy in the 28 EU countries, said that the companies were Valve Corp, the owner of the world’s largest video game distribution platform ‘Steam’, and five game makers – Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.
“In a true digital single market, European consumers should have the right to buy and play video games of their choice regardless of where they live in the EU,” European Competition Commissioner Margrethe Vestager said.
The Commission has sent what it calls a “statement of objections” to the companies, allowing them to reply and request hearings to present their arguments.
Companies found guilty of anti-competitive behaviour can be fined up to 10 percent of their annual global turnover.
The Commission said it was concerned that Valve and the five game publishers agreed to prevent cross-border sales by geo-blocking the ‘activation keys’ that enable consumers to be able to play games.
This may have prevented consumers from buying cheaper games available in other EU countries.
EU antitrust regulators opened its investigation in February 2017, at the same time also looking into online sales of electronics and hotel rooms.
EU rules prohibit geographically based restrictions that undermine online shopping and cross-border sales. Last month, it fined Nike for blocking cross-border sales of soccer merchandise.
Source: Venture Beat
More important is the company's claim that few titles were affected by geo-blocking, that it shouldn't be subject to any penalties for providing a platform on which other companies did wrong and that the commission's complaint arrived a few years late:
"The region locks only applied to a small number of game titles. Approximately just 3% of all games using Steam (and none of Valve's own games) at the time were subject to the contested region locks in the EEA [short for European Economic Area]. Valve believes that the EC's extension of liability to a platform provider in these circumstances is not supported by applicable law. Nonetheless, because of the EC's concerns, Valve actually turned off region locks within the EEA starting in 2015, unless those region locks were necessary for local legal requirements (such as German content laws) or geographic limits on where the Steam partner is licensed to distribute a game. The elimination of region locks will also mean that publishers will likely raise prices in less affluent regions to avoid price arbitrage. There are no costs involved in sending activation keys from one country to another, and the activation key is all a user needs to activate and play a PC game."
The European Commission charged Valve, the owner of a video distribution platform, and five game publishers on Friday with preventing EU consumers from shopping around within the European Union to find the best deal for the games they offer.
The case is the latest move by EU antitrust regulators against cross-border curbs on online trade, key to what is seen as a major part of economic growth in the 28-country bloc.
The Commission, which oversees competition policy in the 28 EU countries, said that the companies were Valve Corp, the owner of the world’s largest video game distribution platform ‘Steam’, and five game makers – Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.
“In a true digital single market, European consumers should have the right to buy and play video games of their choice regardless of where they live in the EU,” European Competition Commissioner Margrethe Vestager said.
The Commission has sent what it calls a “statement of objections” to the companies, allowing them to reply and request hearings to present their arguments.
Companies found guilty of anti-competitive behaviour can be fined up to 10 percent of their annual global turnover.
The Commission said it was concerned that Valve and the five game publishers agreed to prevent cross-border sales by geo-blocking the ‘activation keys’ that enable consumers to be able to play games.
This may have prevented consumers from buying cheaper games available in other EU countries.
EU antitrust regulators opened its investigation in February 2017, at the same time also looking into online sales of electronics and hotel rooms.
EU rules prohibit geographically based restrictions that undermine online shopping and cross-border sales. Last month, it fined Nike for blocking cross-border sales of soccer merchandise.
Source: Venture Beat
Update 4/5/19, 9:20 a.m. PT: Valve sent us a statement in response to the European Commission's announcement. The company reiterated that the commission's issues don't involve sales through Steam, just Steam activation keys used by physical copies of games and said it neither receives compensation directly from the companies nor a portion of sales for providing this service.
More important is the company's claim that few titles were affected by geo-blocking, that it shouldn't be subject to any penalties for providing a platform on which other companies did wrong and that the commission's complaint arrived a few years late:
"The region locks only applied to a small number of game titles. Approximately just 3% of all games using Steam (and none of Valve's own games) at the time were subject to the contested region locks in the EEA [short for European Economic Area]. Valve believes that the EC's extension of liability to a platform provider in these circumstances is not supported by applicable law. Nonetheless, because of the EC's concerns, Valve actually turned off region locks within the EEA starting in 2015, unless those region locks were necessary for local legal requirements (such as German content laws) or geographic limits on where the Steam partner is licensed to distribute a game. The elimination of region locks will also mean that publishers will likely raise prices in less affluent regions to avoid price arbitrage. There are no costs involved in sending activation keys from one country to another, and the activation key is all a user needs to activate and play a PC game."
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