EU fines Valve and ZeniMax €1.6 million each for geo-blocking

The Commission fines game publishers for breaking competition rules through geo-blocking. Valve and ZeniMax have to pay 1.6 million euros and Focus Home 2.8 million euros. Bandai Namco, Capcom and Koch Media were also fined.

According to the Commission, Valve and the other five publishers have restricted cross-border sales of certain PC games based on users’ geographic location within the European Economic Area. These geo-blocking practices are in violation of the competition rules in force in the European Union.

This revolves around Steam and the geo-restrictions that are possible to set via the platform. The Commission found that the combination of the activation keys on Steam and the location control function offered by Valve to other publishers enables geo-blocking based on the geographic location of the user.

The investigation revealed that Valve, along with individual publishers, provided geo-restricted activation keys in certain member states. Users outside those particular member states were then unable to activate their PC game. Specifically, it was about preventing activation of certain games outside the Czech Republic, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania. It concerned about a hundred PC games, so European consumers were not or not fully able to shop around for the best deal in the different Member States.

This case started in 2017 with an investigation by the European Commission. It zoomed in on similarities between Valve and the five game publishers. As a result, the parties offered cheaper game activation codes through Steam in some EU countries, while EU consumers from other countries were unable to use those codes. For example, a distinction was made on the basis of the user’s geographic location, which, according to the Commission, is contrary to EU competition rules. The Commission also stated that the five publishers have imposed contractual export restrictions on other distributors.

Valve was the only one who opposed the procedure and did not cooperate with the Commission. Therefore, Valve’s fine has not been reduced. At four other publishers, the fines have been reduced by ten percent because they have collaborated with the Commission. Capcom’s fine has been reduced by fifteen percent based on the degree of cooperation. In doing so, it itself provided evidence for the Commission’s investigation and acknowledged the established facts and breaches of the rules.