Valve and ZeniMax are among the publishers under EU investigation for illegal geo-blocking

    
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A number of major games publishers are under a spotlight cast by the European Commission for breaking EU competition rules. Valve, ZeniMax, Bandai Namco, Focus Home Media, and Koch Media are all directly named in a press release from the Commission that announced the move yesterday, stating that the companies treated consumers unfairly by including geographical blocks in their games, which prevented cross-border sales from other EU countries.

According to the Commission, the use of region-specific activation keys denied EU customers the benefit of shopping around for the best price in a single digital market — a breach of EU antitrust rules. Commissioner Margarethe Vestager elaborates:

“In a true Digital Single Market, European consumers should have the right to buy and play video games of their choice regardless of where they live in the EU. Consumers should not be prevented from shopping around between Member States to find the best available deal.”

All five companies are granted some time to read over the Commission’s statement, respond in writing, and request a hearing to present a defense. Valve has already done so, stating that a small number of Steam titles fall under the EU violation, and none of them are published by Valve itself:

“Approximately just 3% 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 EC’s extension of liability to a platform provider in these circumstances is not supported by applicable law. Nonetheless, because of the EC’s concerns, Valve actually turned off region locks within the EEA 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.”

While the statement from the EU Commission is certainly damning, it’s important to note that this is a formal Statement of Objections, not an announcement of litigation. That said, if evidence is uncovered that finds companies are infringing on EU rules, they are subject to fines of up to 10% of their annual worldwide turnover.

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G0dl355

I wouldn’t worry about it, the way things are going thanks to nationalism movements spurred on by migrant assimilation issues I doubt the EU will exist in the next 10 years.

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Sana Tan

Valve? Maybe this doesn’t have anything to do, but if it wasn’t for Steam, my lands (3rd world country) would be still plagued with piracy. It’s only because of Steam’s regional prices that people here actually started to buy original games.

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Cypher

It’s not really relevant in this case, one of the key tenets of the EU is freedom of movement for people and goods throughout its member states, this includes digital goods.

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John Kiser

I’m not sure the EU thinks things through fully when they impose rules/laws at this point it feels like lemmings are in charge or something. Pricing something lower in one area because of their per capita GDP being lower is good in a business sense if you want to be able to sell anything to people in those regions. They geo-locked (not for long and it was removed for years as far as steam goes) because people were reselling those lower priced games world wide not just to people in the eu, but outside it too.

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Danny Smith

Anyone remember the last time Valve was in the news for a positive reason?

I’m not being snarky i genuinely cannot remember anymore.

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Armsbend

Release week of Artifact. The week after release it went negative though…

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silverlock

So you suck if you don’t have regional pricing and you also suck if you have regional restrictions sure that’s fair. So everyone one in the EU should be allowed to buy a game based on the price it sells for in the poorest EU country.

K38FishTacos
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K38FishTacos

Right. And everyone in the US should be able to buy a game based on the price it sells for in Mississippi.

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Robert Mann

Basically that is how the EU law reads. The EU isn’t going to be going away from the news anytime soon, and there’s still yet more companies saying “Nope, we do not do business with the EU”. It’s an interesting situation, because of course there’s a giant market there… but right now the cost of not complying with laws that are written very abusively toward business (there’s a good reason to balance both interests) are driving away a lot of interest in that market.

That is all to say, the idea of protecting consumers is a good one, but the EU has decided to take that goal and say “Hey, if you don’t roll over and play dead, we fine you for amounts that are worse than just ditching our market!” Which, predictable, means people choose to leave their market.

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Cypher

An unfair conclusion if I’m honest, as I stated above, the central principles of the EU is the freedom of movement of goods and people throughout its member states. And a company would be foolish to ditch a market of approx. 0.9bn people… that’s why brexit has become a headache for the ‘leave’ camp… They want the membership to the market but not the freedom of movement for people… the UK’s NHS is seen as a big draw for Eastern European “health tourism” in that someone from Estonia for example can come to the uk and get the highest quality medical treatment for free, but its paid for by the British taxpayer… not to mention one of the most generous benefit systems (welfare) in the world.

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Schmidt.Capela

It’s not just the number of people, but the amount of disposable income the average person has, which is very high due to not just good wages in most EU countries but also good public services — often including free or nearly free healthcare and higher education — allowing families to freely spend more of their income. The EU, if taken as a block, is among the very best markets in the world for products and services aimed at the middle class.

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Robert Mann

I’ll grant that the entire system is already screwed. Why? Because the poorest nations pay the same price as the richest (due to the law) in the EU… all because of that. So complying stores simply say “Well, here’s the Euro price.”

The idea of moving goods and working together is good. The problem is that the economics between the nations involved are not comparable. Whenever you deal with that, there’s got to be some adjustments or things become a mess. Simply put, you cause suffering if you don’t.

Thus why there’s so much discontent over the matter on so many forums. Because, to be blunt, some of the member nations have an average wage of more than 5 times that of the poorer member nations. Charging the same price for things between them, without any adjustment for that? Pretty darn stupid if you ask me.

Add to that all the laws and companies that HAVE simply said “Nope” (including some pretty big names) over these laws and… well, I cannot agree that it is not an issue.

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Bryan Correll

I would imagine that since the EU states (notably Belgium) have different laws concerning online gaming that region locking would almost be required in order to comply with the various laws.

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PanagiotisLial1

I believe that is a good thing. Discrimination of any form shouldnt be acceptable.

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silverlock

So your against regional pricing then? Everyone should pay the same price?

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Robert Mann

No, this is not right. This is people abusing the EU as if it were one place, with the same economy. It is not. The argument is the same as people using a VPN to sign up to a Steam account for a different region to buy games at far cheaper prices.

The EU one-digital-market thing is not only unfair, but it actively encourages the behavior seen there. The other option is that it results in nations where the costs should be lower based on their own economy seeing prices shoot up to match the highest cost nations in the EU. (Hint, it already does)

In either regard, it is bad for the consumer… despite the obvious intent. Either distributors will start leaving, or the costs will be unfairly high to poorer member nations. *I’m betting on the second, honestly.*

Mordyjuice
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Mordyjuice

This is probably unrelated but would some of these blocks have to do with certain outlier countries in the EU banning Lock Boxes, probably not since that’s more cash shop related as opposed to blocking whole game purchases I suppose?

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Robert Mann

Partially, maybe. Mostly, though, there’s a big economic disparity between nations there, and since people started buying at the poorest nation’s rates blocks started showing up more and more.

The end point is either that the entire EU may get blocked, or that (more likely) pressure from developers and publishers will lead to everyone in the EU paying the highest rate, since it’s ‘one market’.

However, since this is Steam and in general they just use a ‘euro’ level price… it’s likely an effort either at such things or (as one developer said) at different pricing in cash shops to try to help the poorer nations. Which would seem like a good thing for customers in those places.

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3dom

They should add Pearl Abyss / Blue Hole (Black Desert Online) to the list for forced Russian service for Baltic EU states. That’s potential ~$5M/year * 3 years fines. Hopefully, that’ll teach Koreans not to discriminate people through regional IP blocks.

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John Kiser

Has nothing to do with regional ip blocks and everything to do with whom they licensed to there. Pearl Abyss licensed out to company X to support these regions. They can’t license out to another company under contract to also support those areas as it would be in breach of the other contract.

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3dom

Thanks for explaining ABC of business practices – without knowing the subject. Contract with local publisher has expired six months ago. Kakao manage both EU/NA and ex-CIS territory now yet the regional IP block is still in place. Also laws prevail above any contract terms – at least in EU – so they don’t really matter in case if EU want to fine a company.

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John Kiser

If they want to. However this isn’t a case where the EU will likely get involved as it is baltic states which they seem to care very little about. Also I do know the subject, maybe lighten up a bit there.

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Tanek

Actual unfair business practices should definitely be stopped, but I fear this could end up hurting areas with regional sale prices that might be lower due to lower average incomes. Because we know how EU politicians always take unintended negative consequences into consideration before making a decision.

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3dom

Don’t worry, sale prices are already the same across EU for the most part. There is no difference between price of a game for Bulgaria and France despite x5 difference in average income.

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PanagiotisLial1

3Dom bellow me is right

I live in Greece and most of you already know about the economy troubles we went through and still going through without ever reaching a very confortable economic point in first place during our time with the euro as currency but we had far better days.

What costs for example in a scandinabian eu country 2 euros here will probably cost at least 2.5euros due to direct(VAT) and indirect taxation(extra taxes for fuel, tolls etc that bloat transportration costs and energy/rent/water etc increased costs for shops). All that while its hard enough to find a part time job(officially 4h per day but they always make you work more if you want to keep the job) paying 250-300 euros(monthly) which is like 5 times lower than scandinavian countries(which I used only as random example of countries with good salaries).

Now lets get back to the topic that gaming is also “money for entertainment” pretty much isnce a hobby. If you pay 50 euros per months for a single player game you are actively pay around 15-20% of your salary in one game.

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Robert Mann

It already exists, at least for certain setups. Steam uses EU euro pricing for the most part, although some region locks are supposedly due to trying to break it down further (forgot where I read the response of a developer who said that, it’s too darn early for me!)