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EU Commission Alleges Video-Game Geoblocking
The European Commission has charged Valve Corp., the owner of Steam video-game distribution platform, and five video-game publishers with breaking European Union (EU) competition rules through their use of geoblocking, which restricts access to digital content on a territorial basis. The commission alleges that Steam, the biggest online portal for PC games in the world, and the five companies prevented consumers from purchasing video games outside their home country.
“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,” EU antitrust czar Margrethe Vestager said. “Consumers should not be prevented from shopping around between member states to find the best available deal.”
Following an investigation launched in 2017, the commission alleges that Steam's owner Valve and the five video-game publishers — Bandai Co. Ltd., Namco Ltd., Capcom Co. Ltd., Focus Home Interactive, Koch Media and ZeniMax Media Inc. — struck illegal agreements to prevent consumers from buying games outside their national market.
Valve's Steam platform is a distributor of video games and provides activation keys to publishers that allow consumers to play games. The commission argues that Valve and the five PC video-game publishers agreed to use geoblocked activation keys to prevent cross-border sales.
The five companies also are claimed to have broken EU antitrust rules by including export restrictions in their agreements with a number of distributors other than Valve. These distributors were prevented from selling the relevant PC video games outside the allocated territories, which could cover one or more EU member states. These practices may have prevented consumers from purchasing and playing PC video games sold by these distributors either on physical media, such as DVDs, or through downloads.
The companies have the right to defend their actions. If the commission decides, after hearing the companies' defense, that EU antitrust rules have been broken, it can fine the companies up to 10% of their global turnover.
The charges come in parallel to new EU legislation banning geoblocking that came into force in December 2018 and applies to video games distributed on CDs and DVDs but not downloads.
In March 2019, following an investigation by the commission, The Walt Disney Co., NBCUniversal Media LLC, Sony Pictures Entertainment Inc., Warner Bros. Entertainment Inc. and Sky agreed to end geoblocking conditions they had imposed on distributors of their content.
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Simon Taylor writes for Legal Week, the London-based ALM sibling publication of Entertainment Law & Finance.
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