Update 21/01/2021: Valve responded to the European Commission’s claims, saying it disagrees with the Commission’s conclusions and the fine imposed on them. Read the full statement below. Original story from 1/20/2021.
Valve and a handful of game publishers have clashed with the European Commission for geo-locking Steam keys in certain regions of Europe. Steam owners, along with Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax (Bethesda parent company), were collectively fined € 7.8 million (about £ 6.9 million) for “violating the antitrust rules of HUH”.
“Valve and publishers have restricted cross-border sales of certain PC video games based on the geographic location of users within the European Economic Area (‘EEA’), adhering to so-called ‘geographic blocking’ practices,” the European Commission report said.
An investigation of Valve and the five publishers found that between 2010 and 2015 they had agreements to geo-lock certain Steam keys, preventing them from being activated outside of Czech, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania.
Generally, geographic blocking is done so that games can be sold cheaper in low-income countries. However, people in higher-income countries have often found ways in the past to circumvent regional prices. Obviously, publishers are not fans of this, because it means that these people get the lowest prices.
Valve did not cooperate with the investigations and was fined € 1,624,000 (about £ 1.4 million). The publishers cooperated, however, and had their fines slightly reduced. Nevertheless, SnowRunner and Greedfall’s publisher Focus Home managed to accumulate a € 2,888,000 fine (about £ 2.6 million).
Details of fines.
“Today’s sanctions against the practices of ‘geographic blocking’ by Valve and five PC video game publishers serve as a reminder that, under EU competition law, companies are prohibited from contractually restricting international sales ”Said the Commission’s executive vice president, Margrethe Vestage, said.
“Such practices deprive European consumers of the benefits of the EU’s Digital Single Market and the opportunity to research the most suitable offer in the EU.”
This is perverse because the European Union’s Digital Single Market was designed so that everyone living in the EU can buy and use products from all other EU countries.
This may also not be the end of it, as the Commission states that “any person or company affected by anti-competitive behavior, as described in this case, can take the case to the courts of the Member States and claim damages”.
Update: Last night, Valve issued a statement to Eurogamer alleging that they cooperated with the investigation and disagree with the fine imposed on them:
“During the seven-year investigation, Valve cooperated extensively with the European Commission (“ EC ”), providing evidence and information as requested. However, Valve refused to admit that it broke the law, as required by the EC. Valve disagrees with the EC’s conclusions and the fine imposed on Valve.
“The EC charges are not related to the sale of PC games on Steam – Valve’s PC game service. Instead, the EC claims that Valve has enabled geo-locking by providing Steam activation keys and – at the request of publishers – blocking those keys for specific territories (“region locks”) within the EEA. These keys allow a customer to activate and play a game on Steam when the user purchased it from a third-party reseller. Valve provides Steam activation keys for free and does not receive any portion of the purchase price when a game is sold by third-party resellers (such as a reseller or other online store).
“Region locks apply only to a small number of game titles. Approximately only 3% of all games using Steam (and none of Valve’s own games) at the time were subject to contested region blocks in the EEA. Valve believes that the extension of EC liability to a platform supplier in these circumstances is not supported by applicable law. However, because of EC concerns, Valve did indeed turn off region blocks within the EEA as of 2015, unless those region blocks were necessary for local legal requirements (such as German content laws) or geographic boundaries about where the Steam partner is licensed to distribute a game. Eliminating region blocks can 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 everything the user needs to activate and play a PC game. “