EU Commission fines games publishers €7.8 million for geo-blocking

EU Commission fines games publishers €7.8 million for geo-blocking
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The European Commission has fined five PC games publishers for geo-blocking, the practice of preventing cross-border sales. The fine is shared by Valve, the owners of the Steam gaming platform.

Valve and the five publishers – Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax – were accused of deliberately restricting the sales of some games according to the location of the buyer, within the EU and the European Economic Area (EEA).

The practice is known as geo-blocking, and is against the EU’s principle of free movement of goods.

Valve declined to cooperate with the investigation and was fined over €1.6 million. The fines originally levied on the publishers were reduced to just over €6 million because they agreed to cooperate. The largest fine of nearly €2.9 million went to Focus Home, a French company that publishes game like Hood, Evil West and new release Shady Part of Me.

The Steam platform is one of the largest in the world, and allows users to download or stream more than 35,000 games, as well as to import games bought from third parties such as shops.

Parent company Valve offers publishers activation keys that allow their games to be played via Steam. Included in those keys is a territory control function, which can be used to restrict use of the game only to certain countries. The geo-blocking complaint was based on the combination of the Steam activation keys and the territory control function.

The Commission found that by agreeing between themselves to block the games in certain territories, Valve and the individual publishers had carved up the EEA market in breach of anti-trust rules.

The geo-blocking practices concerned around 100 PC video games of different genres, including sports, simulation and action games,” the Commission said in a statement.

They prevented consumers from activating and playing PC video games sold by the publishers' distributors either on physical media, such as DVDs, or through downloads. 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.”

More than 50% of all Europeans play video games. The videogame industry in Europe is thriving and it is now worth over € 17 billion,” said Margrethe Vestager, in charge of competition policy.

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.”

Alan Hope

The Brussels Times

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