Game over for geo-blocking: EU investigates Valve and five publishers

2 Feb 2017

The European Commission is investigating whether bilateral agreements between Valve and video games publishers actually restrict trade within the Digital Single Market. Image: Infocus/Shutterstock

Games distribution platform Valve and five PC games publishers are being investigated by EU anti-trust regulators.

Valve, the distribution platform behind popular services like Steam, is being investigated by the EU alongside Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.

The investigation is one of three being led by EU competition commissioner Margrethe Vestager, who is at the centre of the €13.9bn tax bill levied against Apple. The investigations concern geo-blocking of games, price manipulation amongst electronics manufacturers and fixing of hotel prices.

‘We are looking into whether these companies are breaking EU competition rules’

“E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders,” said Vestager.

“The three investigations we have opened today focus on practices where we suspect companies are trying to deny these benefits for consumers. The cases concern the consumer electronics, video games and hotel accommodation sectors.

“More specifically, we are looking into whether these companies are breaking EU competition rules by unfairly restricting retail prices or by excluding customers from certain offers because of their nationality or location.”

The Digital Single Market is not to be gamed

The purpose of the investigation into Valve and the game publishers is to determine whether the practice of restricting access to games and prices based on location is legal.

“After the purchase of certain PC video games, users need to confirm that their copy of the game is not pirated to be able to play it,” the European Commission (EC) said.

“This is done with an ‘activation key’ on Valve’s game distribution platform, Steam. This system is applied for a wide range of games, including sports, simulation and action games.”

The EC is investigating if bilateral agreements between Valve and the video games publishers actually restrict trade within the Single Market by preventing consumers buying cheaper versions of games in other member states.

Price manipulation

The EC is also investigating electronics manufacturers Asus, Denon & Marantz, Phillips and Pioneer for alleged price manipulation.

The EC alleges that the companies breached EU competition rules by restricting the ability of online retailers to set their own prices for household goods and hi-fi products.

“The effect of these suspected price restrictions may be aggravated due to the use by many online retailers of pricing software that automatically adapts retail prices to those of leading competitors,” the EC said.

“As a result, the alleged behaviour may have had a broader impact on overall online prices for the respective consumer electronics products.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years