EU Called Out Valve To Stop Geo Blocking Games Inside The EU
Valve and five other publishers may be in breach of EU competition rules, according to a statement from the European Commission. The problem? Geo-blocking games. The Commission says Valve, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax have entered into bilateral agreements that stop people from acquiring and playing PC games outside of their region, which is apparently against EU antitrust rules.
“The Commission’s preliminary view is that Valve and the five PC video game publishers entered into bilateral agreements to prevent consumers from purchasing and using PC video games acquired elsewhere than in their country of residence (so-called ‘geo-blocking’),” says the Commission. “This is against EU antitrust rules.”
The games concerned were sold mainly in Eastern Europe – Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Romania – and couldn’t be used elsewhere in the EU because of the geo blocked activation keys. This contravenes the principles of the digital single market, says commissioner Margrethe Vestager, in charge of competition policy.
The practice of getting cheaper deals abroad is perfectly common, well beyond video games, but there are an increasing number of obstacles when it comes to purchasing items online from a foreign country. The Commission found that 63 percent of websites investigated in 2015 did not allow people to buy from another EU nation. In December last year, a new regulation was put in place to “end unjustified Geo blocking online”.
“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,” said commissioner Margrethe Vestager. “Consumers should not be prevented from shopping around between Member States to find the best available deal. Valve and the five PC video game publishers now have the chance to respond to our concerns.”
The Commission’s concerns go beyond the arrangement the publishers made with Valve, too. Four of the five publishers Capcom isn’t included—apparently broke antitrust laws by including “contractual export restrictions” that stopped distributors from selling PC games outside specified regions, amounting to one or more EU countries.
New EU rules implemented in December 2018 specifically forbid what the EC calls unjustified geo-blocking, and the present expression of dissatisfaction underscores that stance. The conflict here is between companies trying to tailor their sales strategy on a per-country basis and the EU’s effort to create a market that, like the United States, maintains a single basic price across all states.
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, she says.
Consumers should not be prevented from shopping around between Member States to find the best available deal. Valve and the five PC video game publishers now have the chance to respond to our concerns.
Once Valve and co have had a chance to respond, the Commission will then determine if there’s enough evidence of a breach in antitrust rules. If there is, the Commission could decide to put a stop to it and make the publishers pay a fine of up to 10 percent of their annual turnover. Sergey Galyonkin of SteamSpy and now Epic estimated that Valve made $4.3 billion in revenue in 2017 just from Steam.
A Statement of Objections has been sent to Valve and the other publishers outlining the concerns in the Commission’s preliminary view. It’s worth noting that this is a process, and the Commission isn’t bringing down the hammer just yet. The publishers can now respond to the objections, giving them an opportunity to make the necessary changes or refute the accusations.