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Geoblocking: Valve and 5 video game publishers sanctioned up to 7.8 million euros by the EU

The European Commission has imposed a total fine of € 7.8 million on six video game publishers – Valve, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax – for breaking the rules on anti-competitive practices.

It should be noted that the financial penalties imposed on publishers have been reduced, from 10% for Bandai, Focus Home, Koch Media and ZeniMax to 15% for Capcom, due to the latter’s cooperation with the Commission. In contrast, Valve chose not to cooperate with the EU executive and was fined more than 1.6 million euros.

Geographic blocking practices prohibited

Valve, owner of the largest video game distribution platform in the world “Steam”, and these five publishers prevent the purchase of video games in other member states, thus engaging in strictly so-called “geo-blocking” practices. prohibited, concludes the European Commission in its decision.

Indeed, these practices deprive European consumers “benefits of the EU’s digital single market” and of “the ability to compare prices to find the offer“the most advantageous,” explains Margrethe Vestager, executive vice-president responsible for competition policy.

In practice, Valve Corporation distributes PC video games digitally from each of the five publishers and provides “activation keys”. They are necessary when a game has been purchased from a third party, allowing consumers to still be able to play it. It is in fact a way of checking its authenticity.

Restrictive bilateral agreements

However, the publishers have agreed to knowingly prevent consumers from buying and using video games acquired elsewhere than in their country of residence via “geo-blocked” Steam activation keys. Therefore, “users located outside a designated member state could not activate certain PC video games using Steam activation keys,” said the EU executive in its decision.

In other words, these companies have agreed that games purchased in a state where the price is lower cannot be activated in other member states. For example, if a German internet user decides to buy a video game from a Hungarian site because it costs less, Steam simply prevents him from playing by blocking the activation key.

Valve denies accusations

The European Commission has been investigating these practices since February 2017, when it decided to open a formal examination procedure relating to bilateral agreements. In September 2019, she directed these accusations to Valve and the 5 publishers. At that time, the company responded in a short press release that geo-blocking only affected about 3% of its platform’s catalog. An argument that has not convinced the EU.

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