The European Commission fined Valve, Bandai Namco, Focus Home, Koch Media, and ZeniMax a total of €7.8 million for breaches of EU antitrust rules. A post from the European Commission explains the violations and breaks down the fines for each company.
The violations come in the form of geo-blocking practices. The company restricted cross-border sales of certain PC games based on people’s location within the European Economic Area (EEA).
The European Commission reduced the fines on the violating publishers because the companies cooperated. Valve chose to not cooperate with the European Commission and has been fined €1.624 million. Below are the breakdowns of the fines of the five game publishers.
Margrethe Vestager, executive vice-president in charge of competition policy explained the violations:
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 European Commission ruled that by agreeing to geo-block certain games based on people being outside a specific territory, that Valve and the game publishers partitioned the EEA market and violated EU antitrust rules.
Specifically, Valve and the five game publishers formed bilateral agreements that prevented the activation of certain games outside of specific countries. The European Commission explains:
- Bilateral agreements and/or concerted practices between Valve and each of the five PC video game publisher implemented by means of geo-blocked Steam activation keys which prevented the activation of certain of these publishers’ PC video games outside Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania, in response to unsolicited consumer requests (so-called “passive sales”). These lasted between one and five years and were implemented, depending on the cases, between September 2010 and October 2015.
- Geo-blocking practices in the form of licensing and distribution agreements concluded bilaterally between four out of the five PC video game publishers (i.e. Bandai, Focus Home, Koch Media and ZeniMax) and some of their respective PC video games distributors in the EEA (other than Valve), containing clauses which restricted cross-border (passive) sales of the affected PC video games within the EEA, including the above-mentioned Central and Eastern European countries. These lasted generally longer, i.e. between three and 11 years and were implemented, depending on each bilateral relationship, between March 2007 and November 2018.
The European Commission first opened antitrust proceedings about these agreements on February 2, 2017. The Commission sent Statements of Objections to Valve and the five publishers on April 5, 2019.