Valve and five game publishers fined millions for geo-blocking Steam games in EU

Valve and five game publishers fined millions for geo-blocking Steam games in EU

Valve and five PC video game publishers have been fined a total of €7.8 million (around $9.5 million) by the European Commission for restricting cross-border game sales in the European Economic Area. The Commission said that the companies geo-blocked around 100 PC video games, preventing them from being activated and played outside certain EU countries. This broke the EU’s Digital Single Market rules which prohibit those types of barriers.

The European Commission says the geo-blocking was used to prevent games being activated outside Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia, and Lithuania. Geo-blocking prevents gamers living in EU countries with higher average incomes from being able to save money buying them in EU states where they’re cheaper and then activating them on Steam. The fines do not relate to games sold directly on Steam, but to games sold through third-party sellers that can be activated on Steam. Steam activation keys were geo-blocked between 2010 and 2015, the European Commission said.

Valve spokesperson Doug Lombardi said this region-locking was done at the publishers’ request, and that the company doesn’t believe it should be held liable for this decision. He added that the company provides the keys free of charge. Valve ended the practice in the EEA in 2015, Lombardi said, after which it only allowed region-locking in specific circumstances like complying with content laws in specific EU member states.

“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,” the European Commission’s head of competition policy said. “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.”

In addition to the geo-blocking relating to Steam activation keys, the European Commission said four of the publishers — Bandai Namco, Focus Home, Koch Media, and ZeniMax — also restricted cross-border sales with other game distributors. This occurred between 2007 and 2018, the Commission says.

Five publishers were fined in total. Focus Home was fined almost €2.9 million (around $ 3.5 million), ZeniMax over €1.6 million (around $2 million), Koch Media almost €1 million (around $1.2 million), Capcom €396,000 (around $480,000), and Bandai Namco €340,000 (around $410,000). Because each of these companies cooperated with the investigation, their fines were reduced by between 10 and 15 percent. However, the European Commission says Valve “chose not to cooperate,” and that it will be fined over €1.6 million (around $1.9 million).

Valve disputes this, and said it plans to appeal the decision. “During the seven year investigation Valve has cooperated fully, providing all requested evidence and information to the Commission,” a Valve spokesperson said. “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.” At the time, the region locks only applied to 3 percent of games using Steam, the spokesperson added.

The European Commission opened its formal investigation into the practice of geo-blocking back in 2017, and sent its Statement of Objections to Valve and the five publishers back in 2019.

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