Valve, Capcom & Bethesda Fined $12 Million For ‘Geo-Blocking’ PC Games

Valve, Capcom & Bethesda Fined $12 Million For ‘Geo-Blocking’ PC Games
Image: Valve

The EU have fined Valve and five publishers a total of €7.8 million ($12.3 million) over their practice of “geo-blocking” PC game sales on Steam, which basically means forcing users in a country (say, Germany) to only pay the German price for a game, instead of letting them buy a cheaper version of the same game from a different European country.

Geo-blocking breaches EU antitrust rules, and so the five publishers cited — Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax (Bethesda) — were fined around €6.2 million. As the owners and operators of Steam, Valve — who “chose not to cooperate with the Commission” — were fined €1.6 million.

“Today’s sanctions against the “geo-blocking” practices of Valve and five PC video game publishers serve as a reminder that under EU competition law, companies are prohibited from contractually restricting cross-border sales”, EU competition Executive Vice-President Margrethe Vestager says. “Such practices deprive European consumers of the benefits of the EU Digital Single Market and of the opportunity to shop around for the most suitable offer in the EU”.

If the “Valve chose not to cooperate” thing sounds familiar, that’s because the company was similarly unhelpful when faced with lawsuits in Australia, before the Australian Competition and Consumer Commission forced their hand.

Comments

  • To me, rather than geoblocking, a simpler solution would just be to have a universal price. It’s the same product, being delivered through the same service, so it makes zero sense to charge different prices for it based on what country you live in. You shouldn’t be charging a country higher prices than another simply because their economy is better.

    • Its surprising common practice in most industries. Best example I can think of is the NBA league pass. If you buy it in Australia it costs almost $200. However if you buy the league pass from India through a VPN it costs about $20 after currency conversion.

    • Unfortunately it’s because of publishers in each region want their slice of pie and that screws over the end consumer. Nintendo of Europe will be damned in they share space with Nintendo of America, or Marvelous refusing to slap their Switch CE’s on Amazon like a normal company and trying to make you order from their EU store, because they don’t want XSeed getting their sales. You’ll notice a lot of publishers that are small or entirely independent use a non-geolocked price and have a universal one.

      As always, blame the middlemen, because they ruin everything.

    • The problem there is some countries can’t afford to pay Western game prices when the countries average wage is far lower. For instance Russia the average wage is something like 50% lower than the US minimum wage. Recommend retail price on games is more about what the average consumer in a region can comfortably afford while still be profitable, but not being overpriced to promote piracy.

      EUs issue is that EU Law says prices must be consistent across the entirety of the union in Euro, geo-blocking can still exist between EU and the US, UK, Russia, China etc… but not within the EU itself.

      • My point is, the product – whatever that happens to be, should be the same price for everyone. It’s the same product. Western countries should get charged the same amount as anyone else. I understand geoblocking can still happen outside the EU, but my point is, it shouldn’t be a thing in the first place.

        The infamous “Australia tax” means we pay a premium for no real reason other than the fact that our economy is strong. This is a constant point of contention and many complaints with Australian consumers, and there was even a government probe into this practice against some of the biggest software companies a year or two ago. When it’s cheaper to fly to another country, buy the software and fly back than it is to just buy the software locally, that’s a ridiculous situation.

        • Australia tax is different to the reasons geo-blocking exists.

          Australia tax was a refusal for US companies on digital platforms to include regional pricing for Australia and to do proper currency conversion.

          Again this was a huge effort to stop piracy in Asia and Russia by making them pay a reasonable local price for games.

          Universal pricing only works if universal income existed, but when Chinese workers earn mere dollars a day… should they pay 3 months salary to play a Nintendo game. Else plainly put games would be outpriced out of the hands of whole entire countries in Northern Europe, most of Asias, Africa and South America… piracy would blow out, and Western consumers with an abundance of piracy options would refuse to buy games.

          Its an economic balancing act. Regional pricing is an economic reality in most industries.

          • You’re missing my point.

            No, Chinese workers shouldn’t pay 3 months salary for a game. My point is, what those Chinese workers pay should be the same price *everyone* pays. I’m not saying those countries with poorer economies should pay the higher prices, I’m saying the opposite – that the countries with stronger economies should pay the lower prices.

            It’s the same product, and it should cost the same. For larger physical products sure, I can understand wanting to cover shipping costs, that’s reasonable. But for a digital product with no such requirements? It’s just a rort.

            And Australia tax is 100% about companies just charging us more for products (especially consumer electronics) because they can.

          • Inverse… if globally we paid the lowest price, that’s more than a 60-70% discount on the AAA titles on release date. That would significantly hurt developers, they would immediatly increase that lowest universal price and as stated effect poorer countries and trigger more piracy. As I said universal pricing doesn’t work in a fractured global economy… true there is still a few dodgy prices and breaches of free trade agreements… but that’s what regulators like the EU and ACCC are there to chase, which is why this EU win is good.

          • Australia tax predates digital platforms by a long time. It was charging more for electronics and consumer goods (including games) because… well… they could get away with it. Never mind that the centres of production that actually made the goods are closer to us than the US.

    • The problem is that since people in different countries have different capacities to pay, you’d end up with a different type of discrimination.

      A developer might not be able to make a profit if they sell a game world wide at a price that is affordable to someone on the median wage in India. On the other hand, selling at the current US price world wide will make the game inaccessible in many parts of the world and likely give up those markets to piracy.

      I’m really not sure what the best option here is. Perhaps offering cheaper language-locked versions of games in Hindi, Russian, etc with no geo-blocking would be a better solution. That has its own problems with fragmenting the user base though.

  • Valve may have not known it was required to participate, when ACCC couldn’t contact Valve, served them papers and received no response… Valve only responded after it became a news feed.

    Valve didnt respond to ACCC legal action, it responded to a Kotaku article flagged by a Media Watch service.

    • If true (and I doubt it), that is so very, very much worse. The fact that a corporation can claim to have been unreachable by regulators and courts and only deign to make themselves available to meet their legal obligations through watching the media should be fucking illegal in and of itself.

      If ANYONE should have a direct line to get the company’s attention, it should be the entities the company is responsible for answering to.

      • That’s why default judgements exist. Swiggity swoogity the government ends up owning all that booty, because if they issue a default a judgement they roll in and take all of the assets available in Australian jurisdiction to pay the debt (including any moneys in bank accounts). Idiots ignore court orders and Valve was stupid not only for ignoring them, but thinking that “we don’t sell anything in Australia” was going to cut it as an excuse.

      • Fully true, ACCC said that they tried every option to reach Valve to start dialogue over issues to resolve them without legal action, but found it impossible to reach an actual person. So they served papers, made the press announcement (saying they couldn’t reach Valve) then Valve reacted within hours of hitting games media.

        At the end of the day, they paid a huge fine, cause ACCC wanted to talk… and no one answered.

        ACCC policy is legal action and fines as a last resort… instead Valves closed door policy gave them one of the easiest precedent setting wins in recent Australian history.

        • In addition to all this (correct me if I’m wrong) Valve made the mistake of having an American/British law firm call the shots and got absolutely obliterated by both the Federal and High Courts. It never seems to end well when multinational law firms get involved, because they don’t seem to understand the local lay of the land and pay the price for that lack of diligence.

          • When the law itself has a section that has to remind people “You can’t contradict the law by making your own rules” is hilarious to watch people argue against that one. Its like a big “I WIN” button that ACCC can push anytime.

          • My glee for that lawsuit because of all the fails from Valve can’t be understated. I haven’t laughed so hard at lawyers stuffing up in years. “We’re electing to ignore the law” is what I’d expect from a Monty Python skit and seeing that happen in real life was Christmas come early.

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