Non-RPG General News - Valve and five Publishers fined for Geo-Blocking

[HiddenX]

Valve and five publishers have been fined for geo-blocking in Europe:

Antitrust: Commission fines Valve and five publishers of PC video games EUR 7.8 million for "geo-blocking" practices

The European Commission has fined Valve, owner of the online PC gaming platform "Steam", and the five publishers Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax EUR 7.8 million for breaching EU antitrust rules.

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 fines for the publishers, totalling over EUR6 million, were reduced due to the companies' cooperation with the Commission. Valve chose not to cooperate with the Commission and was fined over EUR1.6 million.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "More than 50% of all Europeans play video games. The videogame industry in Europe is thriving and it is now worth over EUR 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".

Steam is one of the world's largest online PC video gaming platforms offering more than 35 000 games worldwide. It allows users, upon authentication, to directly download or stream PC video games. It also allows users who buy PC video games outside Steam, such as in brick-and-mortar shops (e.g. on DVDs) or digitally through downloads from third-party websites, to activate and play video games on Steam.

Valve provides to video game publishers the technical means to activate and play games on Steam, including those games bought outside Steam, through the so-called, "Steam activation keys". Publishers include those keys in their PC video games for user authentication/activation. The PC video games are then sold by third party distributors across the EEA. Valve also offers to the publishers a territory control function, which enables the setting up of geographical restrictions upon activation. The combination of Steam activation keys with the territory control function enables the "geo-blocking" of PC video games based on the geographical location of the user.

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More information.

 

[Silver]

The reality is that those countries economies vary vastly in terms of earning power; thus the need for the pricing differential and restriction. If the price were to be set consistently EU wide rather than by country, it would not be at the cheaper rate, meaning gamers will lose out on the platform and go to key resellers of which some are dodgy.

 

[HiddenX]

Valve answered:

Valve’s 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.

 

[Redglyph]

Not an easy issue, it seems.

 

[hairyscotsman2]

Thank you. Potential price hikes is never good.

More info on what the Digital SM currently is, is here. There's definitely some good points (removing mobile data roaming charges was a big one when working or holidaying in another member state, and they're not coming back at the moment for UK customers, although the legal protection to stop companies putting them back is gone due to Brexit) and overall savings are expected with reduced bureaucracy.
The content and DRM legal side has certainly been (and would be) contentious.

https://ec.europa.eu/digital-single-market/en/shaping-digital-single-market

The one thing I've admire with the EU is they take no nonsense (suing Microsoft, making Amazon pay taxes) from multinational corporations, and it strikes me as a major advantage overall, in a global age, to have a regulatory framework that operates across international borders.

 

[Redglyph]

I don't see the need to lock geographically. If customers decide to buy from another country, it's their right, and if by doing so they import illegal products, it's their responsibility. It's not up to Valve to decide who's buying from where.

Indeed the buying power is not uniform even in the EU. If a country has a lower price and exports more, how is that bad for them?