Investigation concerns geo-blocking practices
The bilateral agreements between Valve and video game publishers Bandai Namco, Capcom, Focus Home, Koch Media, and ZeniMax Media raised suspicion for potential geo-blocking practices. Through these, companies can prevent consumers from purchasing digital content due to of their location or country of residence.
Using Valve’s Steam platform, a game distribution service where the company conducts a lot of its business, players purchase various digital content. After purchasing the game, it has to be activated through the platform, a piracy check. Using activation keys to redeem games, Steam could potentially be used to restrict content based on the country of redemption.
The EU’s perspective on the issue
Such restrictions could lead to players in certain countries receiving worse deals. If a key’s redemption is restricted to a particular country, the press release states that it “may amount to a breach of EU competition rules by reducing cross-border competition as a result of restricting so-called ‘parallel trade’ within the Single Market and preventing consumers from buying cheaper games that may be available in other Member States.”
“E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders,” said Commissioner Margrethe Vestager, in charge of competition policy. “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.”
Video game companies are not the only ones under investigation for digital geo-blocking. Consumer electronics manufacturers and some hotel companies are also targeted for potentially interfering with similar trade rules.
ZeniMax Media confirms cooperation
One of the companies under investigation, ZeniMax Media, already confirmed its cooperation with the European Commission.
“We understand that this investigation is part of a broader review of the sale of copyright content and goods (including TV, film and e-commerce),” said the company in a statement. “We will be cooperating with the Commission to address any concerns and remain committed to ensuring that our consumers can freely purchase and download our games, subject to applicable legal or technical requirements that may apply.”
Valve on the radar, again
The EC investigation is another situation where Valve is the target of a law-related issue.
Last year, a class-action lawsuit was filed against the company, which was eventually rejected. The company was also in conflict with the Washington State Gambling Commission due to potential illegal betting activities. Although Valve was ordered to discontinue skin betting through its Steam platform, it did not claim any wrongdoing.
Valve also broke consumer protection policies, according to an Australian court, by not having a refund policy. Additionally, Valve was the subject of a patent infringement lawsuit filed by British Telecommunications in July 2016.