European Commission sends Statements of Objections to Valve and five videogame publishers on “geo-blocking” of PC video games

The European Commission has informed Valve, owner of the Steam video game distribution platform, and five videogame publishers, of its preliminary view that the companies prevented consumers from purchasing videogames cross-border from other Member States, in breach of EU competition rules.

Valve, via Steam, digitally distributes PC video games from each of the five PC video game publishers concerned by the investigation. At the same time, Valve provides “activation keys” to these publishers.

These “activation keys” are required for consumers to play a number of PC video games bought on channels other than Steam, i.e. downloaded or purchased on physical media, such as a DVD. After the purchase of certain PC video games, users need to confirm their “activation key” on Steam to authenticate the game and be able to play it. This system is used for a wide range of games, including sports, simulation and action games.

The Commission’s preliminary view is that Valve and the five PC video game publishers entered into bilateral agreements to prevent consumers from purchasing and using PC video games acquired elsewhere than in their country of residence (i.e. “geo-blocking”).

In particular, the Commission is concerned that:

  • Valve and the five PC video game publishers agreed, in breach of EU antitrust rules, to use geo-blocked activation keys to prevent cross-border sales, including in response to unsolicited consumer requests (so-called “passive sales”) of PC video games from several Member States (i.e. Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and in some cases Romania). This may have prevented consumers from buying cheaper games available in other Member States; and
  • four of the other publishers broke EU antitrust rules by including contractual export restrictions in their agreements with a number of distributors other than Valve. These distributors were prevented from selling the relevant PC video games outside the allocated territories, which could cover one or more Member States. These practices may have prevented consumers from purchasing and playing PC video games sold by these distributors either on physical media, such as DVDs or through downloads.

The Commission’s preliminary view, outlined in its Statements of Objections, is that these business practices partitioned markets according to national borders and restricted passive sales to consumers in breach of Article 101 of the Treaty on the Functioning of the European Union. These business practices ultimately denied European consumers the benefits of the EU’s Digital Single Market to shop around for the most attractive offer. To read the Commission’s press release in full, click here.