The European Commission is investigating Valve for unfair geo-blocking practices

Valve is being investigated by the European Commission for anti-consumer practices owing to its new geo-blocking system, which prevents gamers from buying games and receiving gifts from gamers living in other countries that do not match their home country as recognised by Steam. The original complaint that launched the investigation lists Valve Corporation and five of its partners, namely Bandai Namco, Capcom, Focus Home Interactive (of Farming Simulator fame), Koch Media (parent company of Deep Silver), and Zenimax.

The investigation currently is looking at whether these six companies colluded together to first prevent customers from purchasing digital content in a country that is not their country of origin, and whether they are restricting the consumer’s right to buy products from a country that may have the goods for sale at a cheaper price. The EC’s press release on the subject also mentions that the use of regionally-locked software keys may prevent gamers from playing a game in a region that it isn’t available in, and is an additional feature of the investigation.

What is interesting about this is that no-one has actually complained about this issue to the EU or the EC as yet. The commission is running the investigation on its own initiative, which means that it might be seeking damages as a result of these practices. The EU fines companies not adhering to their laws from time to time, but typically does not intervene on behalf of all EU citizens unless there’s a serious problem.

With any luck, the outcome of this investigation may prove useful in its application to other software clients and online retailers like Bethesda, Electronic Arts, and Ubisoft.

The original press release follows below.

Press Release

The Commission is investigating bilateral agreements concluded between Valve Corporation, owner of the Steam game distribution platform, and five PC video game publishers, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax. The investigation concerns geo-blocking practices, where companies prevent consumers from purchasing digital content, in this case PC video games, because of the consumer’s location or country of residence.

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. 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 investigation focuses on whether the agreements in question require or have required the use of activation keys for the purpose of geo-blocking. In particular, an “activation key” can grant access to a purchased game only to consumers in a particular EU Member State (for example the Czech Republic or Poland). This 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.

Source: European Commission