EU fines Valve and major game publishers for geo-blocking titles
Nearly two years after filing charges, the European Union is demanding remedies from Valve and other publishers for geo-blocking games. The European Commission has fined Valve, Bandai Namco, Capcom, Focus Home, Koch Media and Bethesda owner ZeniMax a total of €7.8 million (over $9.4 million) for restricting access to some Steam games between EU countries. The move violated competition law barring companies from restricting cross-border sales in the Union, officials said.
There were varying geo-blocking agreements and “concerted practices” between Valve and the publishers from September 2010 through October 2015, according to the Commission. The publishers saw their fines reduced by at least 10 percent for cooperating with regulators, but Valve is facing a full penalty (over €1.6 million, or more than $1.9 million) for fighting the charges.
The geo-blocking ostensibly prevented people in one EU country from buying cheaper Steam keys in another, cutting into profits. The fines are relatively small for most of the companies. However, they do send a signal that the EU won’t tolerate game companies (and other digital goods makers) limiting access to games within its market. That’s generally good news for gamers looking for deals, although it could lead to stores and publishers raising prices in some countries to compensate.
Valve provided us with the following statement:
During the seven year investigation, Valve cooperated extensively with the European Commission (“EC”), providing evidence and information as requested. However, Valve declined to admit that it broke the law, as the EC demanded. Valve disagrees with the EC findings and the fine levied against Valve.
The EC’s charges do not relate to the sale of PC games on Steam – Valve’s PC gaming service. Instead the EC alleges that Valve enabled geo-blocking by providing Steam activation keys and – upon the publishers’ request – locking those keys to particular territories (“region locks”) within the EEA. Such keys allow a customer to activate and play a game on Steam when the user has purchased it from a third-party reseller. Valve provides Steam activation keys free of charge and does not receive any share of the purchase price when a game is sold by third-party resellers (such as a retailer or other online store).
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. 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 may also cause publishers to 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.
Update, 1:30PM ET: Added a statement from Valve.
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