Earlier this year the European Commission launched an investigation into several games companies with a focus of looking into “suspected anti-competitive practices.” In particular, the EC was investigating the habit of geo-blocking games , the practice of restricting the ability to purchase certain games depending on the customers geolocation. In addition, the EC looked into games publishers and companies selling games outside of their allocated territories. This all comes hot on the heels of the EC fining Google €1.49 billion for “abusive practices in online advertising”.
The European Commission reported in a statement made in April that it has concern 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.”
- “Bandai Namco, Focus Home, Koch Media and ZeniMax, 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.”
In a report from Reuters, five of the six companies investigated plan to settle the case, with publishers Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax all planning on settling instead of fighting the claims.
The sixth company affected by the case, Valve, has allegedly decided to fight the claims in court. Sources spoken to by Reuters, state that they may intend to ask for a closed-door hearing to argue their case to national watchdogs and senior competition officers from the European Commission. If the ruling is upheld, however, the EC can impose a fine of up to 10% of Valve’s “annual worldwide turnover” as well as demanding an immediate halt to all offending practices.
We’ll be continuing to see how this story develops and what this means for the games industry, so make sure you keep your eyes on our Newsroom.