European Commission levies $9.5 million in fines for 'geo-blocked' Steam games

Cal Jeffrey

Posts: 2,778   +695
Staff member
In context: Video games have a long history of geo-blocking (aka region locking). In many cases, the practice has legitimate uses, such as preventing software from running where it might be illegal or censored. However, in 2018, the EU imposed rules against "unjustified geo-blocking" and views it as a means to "price discriminate" in specific areas in the Union.

The European Commission has fined Valve and five other video game publishers a total of €7.8 million ($9.5 million) for "geo-blocking" certain games. Geo-blocking is when a publisher or, in Valve's case, a distribution platform restricts game sales based on geographic location. The Commission claims this practice violates EU antitrust rules. It is worth noting that the EC's investigation focused on the sale of region-locked activation keys and the games themselves.

Aside from Valve, the Commission named Capcom, Bandai Namco, ZeniMax, Koch Media, and Focus Home as rule-breakers. Collectively the companies blocked more than 100 games from regions including Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia, and Lithuania.

Margrethe Vestager, executive vice-president in charge of competition policy, issued a statement noting that the fines should remind publishers that geo-blocking is not allowed in the European Union.

"More than 50% of all Europeans play video games. The videogame [sic] industry in Europe is thriving and it is now worth over €17 billion. 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. 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."

The five publishers had their fines reduced between 10 and 15 percent for cooperating with the Commission's investigation. Valve chose not to cooperate and received an unreduced penalty of more than €1.6 million ($2 million).

Valve has not commented on the Commission's action. However, when the EC asked the company to stop the practice last year, Valve told The Verge in a statement that only "a small number of games" (about 3 percent) were geo-blocked. It explained that with limited exceptions, it turned off geo-blocking in European regions in 2015. It further argued that it should not be held responsible for publishers that use region-locked activation since it does not directly sell Steam keys.

Image credit: Alexandros Michailidis

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emmzo

Posts: 264   +224
Eastern Europe treated like second hand countries. I hope more fines follow any such discriminative behavior.
 

Bulllee

Posts: 138   +104
You know, you would think that Steam could afford lawyers with international credentials that could help them avoid such silly mistakes. Of course if they did it on purpose they deserve whatever the EU throws at them ....
They will have access to those lawyers but they would probably cost more than the fine!
 

Burty117

Posts: 4,008   +1,962
You know, you would think that Steam could afford lawyers with international credentials that could help them avoid such silly mistakes. Of course if they did it on purpose they deserve whatever the EU throws at them ....
To be fair, it sounds like it's mainly because Valve themselves weren't geo-blocking, publishers were via selling Steam Keys in specific regions.
When the EC asked the company to stop the practice last year, Valve told The Verge in a statement that only "a small number of games" (about 3 percent) were geo-blocked. It explained that with limited exceptions, it turned off geo-blocking in European regions in 2015. It further argued that it should not be held responsible for publishers that use region-locked activation since it does not directly sell Steam keys.
 

Austinturner

Posts: 61   +74
You know, you would think that Steam could afford lawyers with international credentials that could help them avoid such silly mistakes. Of course if they did it on purpose they deserve whatever the EU throws at them ....
I feel this sort of issue happens a lot where american companies don’t take european regulations very seriously, act as they would in the US then get punished for it. I’m not sure if it is ignorance, arrogance or both.
 
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EClyde

Posts: 2,378   +937
The Eups want the populace playing games so they won't be paying attention to what matters. The Eups need all the $ they can get to give it away on social programs. I ain't moving there
 

PEnnn

Posts: 556   +518
The Eups want the populace playing games so they won't be paying attention to what matters. The Eups need all the $ they can get to give it away on social programs. I ain't moving there
Did you return the relief checks the US government sent you because you don't like "social programs"??

What about health insurance, car insurance, home insurance, police, fire Dept and garbage disposal services, etc.... you declined those too, right??

PS: The European countries are sleepless tonight because you "ain't moving there"......
 

m4a4

Posts: 2,185   +2,233
TechSpot Elite
To be fair, it sounds like it's mainly because Valve themselves weren't geo-blocking, publishers were via selling Steam Keys in specific regions.
Yup. But wouldn't make a great article if that was said up front.

I'm not exactly seeing why they're being fined if they weren't directly the ones selling those keys on the Steam store...
 
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Austinturner

Posts: 61   +74
Yup. But wouldn't make a great article if that was said up front.

I'm not exactly seeing why they're being fined if they weren't directly the ones selling those keys on the Steam store...
When you buy from Steam, I thought the transaction was handled by Steam? If so, they are the one who has discriminated between countries?
 

m4a4

Posts: 2,185   +2,233
TechSpot Elite
When you buy from Steam, I thought the transaction was handled by Steam? If so, they are the one who has discriminated between countries?
Steam also supports creating and selling game keys for the games you upload to Steam (I think the only main caveat is that it has to also be sold on Steam). These keys can be sold anywhere you want, and there is a 0% commission.
 
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Austinturner

Posts: 61   +74
Steam also supports creating and selling game keys for the games you upload to Steam (I think the only main caveat is that it has to also be sold on Steam). These keys can be sold anywhere you want, and there is a 0% commission.
Ok, maybe I just haven’t seen that way of buying.
 

DonquixoteIII

Posts: 51   +25
Geo-blocking on ANYTHING should be now ruled illegal internationally. It is a relic of the publishing industry (if memory serves) and copyright laws and goes to the publishing industry carving the world into 'regions'. for its own financial benefit. A semi-legal cartel. It served no purpose then other than to make publishers more money, and certainly serves no purpose now, except more of the same. Global should mean global for consumers as well as distributors. Netflix is a case in point, directly related to the old publishing cartel. US gets one netflix library, europe another, middle east another and so on.

Hopefully, this is the beginning of that.
 

m4a4

Posts: 2,185   +2,233
TechSpot Elite
Ok, maybe I just haven’t seen that way of buying.
You don't because for most smaller devs, it takes a lot to have a proper functioning store (one that's up to par, with a payment provider) just for a few games. Easier to have your webpage just redirect to the store, instead of focusing resources on it and the legalities and other stuff.

Givaways, sites like Humblebundle, and resellers mainly deal with the keys these days.
 

Shadowboxer

Posts: 1,280   +907
The EU has different minimum wages for people all across their country. But oh no Steam can’t do any geo blocking as that’s discriminatory?

Disgusting empire, glad we left.
 

Puiu

Posts: 4,303   +3,060
TechSpot Elite
The EU has different minimum wages for people all across their country. But oh no Steam can’t do any geo blocking as that’s discriminatory?

Disgusting empire, glad we left.
The EU is not a country and the wages are not part of the trade agreements. The UK is going to be EU's dog a long time to come. But don't worry, the EU will allow the US to take the UK for a walk from time to time. :)
 
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Axil00

Posts: 60   +73
The EU is not a country and the wages are not part of the trade agreements.
Right, that is a problem though. As is the VAT used to pay for all those "free" government benefits

It's fine if you like the system but surely you understand why other nations might decline to participate.
 

DonquixoteIII

Posts: 51   +25
If memory serves the EU was formed as a trading bloc, and the commission was put in place to give all the members a say in how the trading field could be leveled to everyone's benefit... Of course there were some winners and some losers, but to be a unified trading bloc there had to be unified trade rules. Each nation is still a unique nation, it gives up nothing of its national identity outside of the trading relationship. Or at least that was the way it was supposed to be.
 

gamerk2

Posts: 474   +368
Right, that is a problem though. As is the VAT used to pay for all those "free" government benefits

It's fine if you like the system but surely you understand why other nations might decline to participate.
Free at the point of sale. The overall cost per person generally ends up being significantly lower then in, say, the US, since the government can drive down prices. Hence why the standard of living is higher in most of Europe now then in the US.
 
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Puiu

Posts: 4,303   +3,060
TechSpot Elite
Right, that is a problem though. As is the VAT used to pay for all those "free" government benefits

It's fine if you like the system but surely you understand why other nations might decline to participate.
But what does VAT have to do with wages and the EU? VAT is another thing that the EU doesn't regulate, every country can set its own VAT. Being in the EU means that if I order something from the EU I pay the regular VAT and that's it. No border taxes and long border delays.

For example, I recently used Amazon Italy to order a Quest 2 and it came from a warehouse in Spain with Germany being a transition point. No border taxes, no border delays, it came in a few days to my door step.
 
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Did you return the relief checks the US government sent you because you don't like "social programs"??

What about health insurance, car insurance, home insurance, police, fire Dept and garbage disposal services, etc.... you declined those too, right??

PS: The European countries are sleepless tonight because you "ain't moving there"......
I recommend you ignore this kind of nonsense in the future since it doesnt deserve to be commented on.