Valve, Capcom and other publishers fined by European Commission for geoblocking

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Six video game publishers have been handed fines from the European Commission for restricting cross-border sales in Europe, a violation of European antitrust rules.

The firm at the centre of this problem is none other than Steam owner, Valve. The other firms in the matter are Bandai Namco, Capcom, Focus Home, Koch Media and Zenimax.

This all started in 2017 when the European Commission opened formal antitrust proceedings into agreements between Valve and the other five firms.

The problem is with how Valve and the firm distributed titles. The Commission explains that Valve and the firms would agree to distribute titles on Steam. Publishers would give Valve keys to the game and Valve would give publishers Steam keys so that physical discs or digital purchases elsewhere can be redeemed on Steam.

The problem is that the Steam keys are geo-blocked so if you were to purchase a game in Country A, it couldn’t be redeemed in Country B.

“These business practices therefore denied European consumers the benefits of the EU’s Digital Single Market to shop around between Member States to find the most suitable offer,” wrote the commission.

It also published the infographic below which explains things visually.

Image – European Commission.

Each of the five publishers has been fined but, because they co-operated with the Commission, the fines were reduced. However, Valve reportedly did not co-operate with the investigation  and received the second largest fine – €1 624 000.

Videogame publisher Reduction for cooperation Fine (€)
Bandai Namco 10 % 340 000 EUR
Capcom 15 % 396 000 EUR
Focus Home 10 % 2 888 000 EUR
Koch Media 10 % 977 000 EUR
ZeniMax 10 % 1 664 000 EUR

Valve, however, has denied the claims that it didn’t co-operate with the Commission.

The Seattle based firm told Eurogamer that contrary to what the Commission reports, it did provide evidence and information during the investigation but declined to admit it broke the rules.

“The region locks only applied to a small number of game titles. Approximately just three percent 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 European Commission’s extension of liability to a platform provider in these circumstances is not supported by applicable law. Nonetheless, because of the European Commission’s concerns, Valve actually turned off region locks within the European Economic Area 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,” Valve wrote in a statement to Eurogamer.

Valve has said it will appeal this ruling.

Brendyn Lotz

Brendyn Lotz

Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.