EU Commission fines Valve and five PC publishers €7.8 million for ‘geo-blocking’ games

The European Commission has fined Valve, Bandai Namco, Capcom, Focus Home Interactive, Koch Media and ZeniMax a combined total of €7.8 million for breaching antitrust rules. Valve did not cooperate with the Commission, and was fined €1.6 million, while the fines for the other five publishers were slightly reduced for their cooperation (not that this helped Focus Home Interactive, which received the biggest share of the fine by far: a whopping €2.9 million of the total).The judgement is the result of one of three investigations began in 2017, and today the Commission writes that: “Valve and the publishers restricted cross-border sales of certain PC video games on the basis of the geographical location of users within the European Economic Area (‘EEA’), entering into, the so called “geo-blocking” practices.” The companies thus “partitioned the EEA market in violation of EU antitrust rules.”The EU’s Digital Single Market regulations have the goal “to end unjustified geoblocking […] Europeans will not have to worry about a website blocking or re-routing them just because they, or their credit card, come from a different country.”That is, if you sell digital products within the EU, you can’t set restrictions on cross-border sales. A key element here is that Steam gives publishers a territory control function, which can be used to set geographical restrictions on activation. This combination of Steam activation keys and the territory control function amounts to geo-blocking the sale of PC games within the EU.The Commission’s judgement goes on to detail the illegal behaviour it found over certain time periods and regions: “Bilateral agreements and/or concerted practices between Valve and each of the five PC video game publishers implemented by means of geo-blocked Steam activation keys which prevented the activation of certain of these publishers’ PC video games outside Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania” between September 2010 and October 2015.It found further examples of this kind of agreement between Bandai-Namco, Focus, Koch and Zenimax with other publishers. These breaches concern the same European countries, and took place over the period March 2007 to November 2018.”The geo-blocking practices concerned around 100 PC video games of different genres, including sports, simulation and action games,” writes the Commission. “They prevented consumers from activating and playing PC video games sold by the publishers’ distributors either on physical media, such as DVDs, or through downloads.”The Commission’s judgement comes with this graphic.(Image credit: EU Commission)The Commision’s judgement then goes on to detail the fine being imposed on each company, detailed in the table below. The five publishers concerned cooperated, and so “the Commission therefore granted reductions to the fines depending on the extent of this cooperation.” Capcom was clearly the most helpful, and received a 15% reduction, while everyone else has to make do with 10%.(Image credit: EU Commission)Even if richly deserved, it’s eye-watering that Focus Home Interactive ends up with by far the biggest fine here, €2.9 million, when so many other of the companies involved are so much bigger in size.Valve is absent from the table of co-operators. “Valve chose not to cooperate with the Commission. The Commission has therefore adopted a prohibition Decision against Valve under the ordinary antitrust procedure and has imposed a total fine of €1,624,000 on Valve.”EU Commission executive vice-president Margrethe Vestager, in charge of competition policy, had the following to say on the judgement.“More than 50% of all Europeans play video games. The videogame industry in Europe is thriving and it is now worth over € 17 billion. Today’s sanctions against the “geo-blocking” practices of Valve and five PC video game publishers serve as a reminder that under EU competition law, companies are prohibited from contractually restricting cross-border sales. Such practices deprive European consumers of the benefits of the EU Digital Single Market and of the opportunity to shop around for the most suitable offer in the EU.”We’ve contacted Valve for comment.

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