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Valve Loses EU Appeal for Geo-Blocking Practices

 |  September 28, 2023

Valve, owner of the popular digital game distribution platform Steam, has lost its appeal against a €1.6 million fine imposed by the European Commission for geo-blocking practices. The European Commission launched an anti-trust investigation in 2019 into several game publishers, including Valve, ZeniMax, Capcom, Bandai Namco, Focus Home Interactive, and Koch Media, regarding the obstruction of cross-border sales of PC video games based on users’ geographical location.

Geo-blocking is a practice that restricts access to content based on a user’s geographic location. In this case, activation keys for PC games were being blocked in countries such as Romania, Estonia, Latvia, Hungary, Poland, Lithuania, and Czechia. The purpose of these geo-blocks was to prevent customers from using VPNs to take advantage of lower game prices in these countries.

The European Commission found these geo-blocking practices to be in violation of the EU’s single market rules, leading to fines being imposed on Valve and other companies involved. Valve argued in its appeal that copyright holders should have the right to charge different prices in different regions. However, the EU General Court rejected this argument, stating that copyright law does not allow for artificial price differences between national markets.

Read more: Valve Facing Antitrust Case Over Steam Gaming Platform

Valve’s loss in the appeal means that the company is still required to pay the €1.6 million fine. It remains uncertain whether Valve will file another appeal to a higher court. This decision raises questions about the balance between region-restricted activation keys and lower prices in countries with lower average incomes.

The European Commission’s investigation and subsequent fines send a clear message that geo-blocking practices are not acceptable within the EU’s single market. Publishers will need to reconsider their pricing strategies and find ways to provide fair access to games across all member states while respecting copyright laws.

Other companies listed in the complaint also received fines. ZeniMax was fined €1.6 million, Focus Home Interactive received a €2.8 million fine, and Capcom and Bandai Namco were each fined less than €400,000.

Source: Game is Hard