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It seems Valve and five publishers have attracted the attention of the EU, as they claim they're breaching EU competition rules. In particular, what the EU say they're doing goes against the "Regulation 2018/302" introduced on December 3rd last year.

The statement from the European Commission, available here, mentions that they've sent Statements of Objections to Valve and Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.

The main concerns from the EU are these:

  • 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.

Valve just sent out a statement, here's what they said in full for those interested:

Earlier today, the European Commission ("EC") sent Statements of Objections ("SO") to Valve and five publishers in an investigation that it started in 2013. The EC alleges that the five publishers entered into agreements with their distributors that included geo-blocking provisions for PC games sold by the distributors, and that separately Valve entered into agreements with the same publishers that prevented consumers in the European Economic Area ("EEA") from purchasing PC games because of their location. 

However, the EC's charges do not relate to the sale of PC games on Steam - Valve's PC gaming service. Instead the EC alleges that Valve enabled geo-blocking by providing Steam activation keys and - upon the publishers' request - locking those keys to particular territories ("region locks") within the EEA.  Such keys allow a customer to activate and play a game on Steam when the user has purchased it from a third-party reseller. Valve provides Steam activation keys free of charge and does not receive any share of the purchase price when a game is sold by third-party resellers (such as a retailer or other online store). 

The region locks only applied to a small number of game titles.  Approximately just 3% of all games using Steam (and none of Valve's own games) at the time were subject to the contested region locks in the EEA. Valve believes that the EC's extension of liability to a platform provider in these circumstances is not supported by applicable law. Nonetheless, because of the EC's concerns, Valve actually turned off region locks within the EEA starting in 2015, unless those region locks were necessary for local legal requirements (such as German content laws) or geographic limits on where the Steam partner is licensed to distribute a game.  The elimination of region locks will also mean that publishers will likely raise prices in less affluent regions to avoid price arbitrage. There are no costs involved in sending activation keys from one country to another and the activation key is all a user needs to activate and play a PC game.

Basically, the EU wants to prevent stores and publishers from making it so that you can't get your games cheaper if you choose to shop in a different country. It can be a pretty difficult topic, certainly one with a lot of complications. The issue gets complicated, since publishers may want to offer certain countries a cheaper price if their wages are traditionally lower but they might not do that if anyone is able to come along and just pay the cheaper price.

What are your thoughts on this?

Article taken from GamingOnLinux.com.
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67 comments
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lunix 5 April 2019 at 4:33 pm UTC
It seems like the EC doesn't know what are content and tax laws and how some countries are poorer.
Poorer EU countries' citizens are very happy to pay as much as the others \s
mirv 5 April 2019 at 4:37 pm UTC
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Normally the EC does a pretty thorough job in these cases. This might not result in massive fines, but it is a warning to play nice.

But, I would have to read everything in much more detail to make up my mind fully. Normally != always, and it's good to fully inform myself.
Kithop 5 April 2019 at 4:46 pm UTC
Geo-blocking is BS, so for once the EU is in the right of it with their demands.

In Canada, the price for a game is the same across the country, whether you're in Ontario or the Yukon (barring GST/PST/HST differences, similar to VAT).

In the US, same deal - it doesn't matter what state you're in, the price of a game is the price of that game.

The article lists some EU member states in the Eurozone and some that aren't - sure, the requirement for currency exchange tends to mean there are winners and losers on the price difference... but isn't the point of the EU the whole 'single market' thing? So set the price of a game in Euro, let non-Eurozone-but-still-EU members buy it for whatever that converts to in their local currency, and otherwise treat the EU as a single 'country'.

I'd argue a step further and say games should just be priced globally in whatever the local currency of the developer/publisher is (e.g. Yen for Japanese games), and the rest of us pay whatever the equivalent of that is in our currency. The devs/publishers want to be paid in their own currency at the end of the day, right? If people are going to pirate it because they can't afford it, going to all the extra effort to get a pittance fraction of the cost from poorer regions just doesn't seem worth it.

But maybe it is, because the 'actual cost' is mostly fixed, and the reproduction/transmission cost of selling additional copies is next to nil (barring translations, etc.). So a game that sells for $60 in the US might still be worth translating and selling for the equivalent of $5 somewhere else. How much of that $60 is profit vs. the $5? What if the game was just... $20 everywhere in the world?

Global economics is hard. ;) But the internet is global. Artificial barriers will get broken, so it's a difficult proposition to figure out how to position your work so that poorer countries with weaker currencies could still afford and enjoy it, while not taking a chunk out of your earnings in wealthier nations. Maybe the 'cheaper' cost version is still enough to break even or make a little bit of money, and the 'wealthier' costing version is pure profit. Maybe the sales in wealthier countries subsidize the sales in poorer ones (though I doubt it - they'd just not bother offering it for sale in said countries then, right?).

I worry for smaller, Indie devs/publishers trying to get this right. I have no sympathy for the likes of EA/Ubisoft/Activision-Blizzard/etc., though, who abuse the crap out of their employees and give their execs multi million dollar salaries and bonuses.
Termy 5 April 2019 at 4:52 pm UTC
Would be nice if this lead to disabling the annoying geoblock for us germans (not regarding price but censorship)
tuxutku 5 April 2019 at 4:54 pm UTC
I can say valve significantly decreased pirating in my country where games about six times more expensive.
EU choose to to go along with lobbyists and i am very disappointed at EU
since i don't really like EU and USA, i will keep searching other countries to settle on even its really hard to do so
P.S: EU was my choice settlement before article 13 ( What a shame...
lunix 5 April 2019 at 4:56 pm UTC
KithopGeo-blocking is BS, so for once the EU is in the right of it with their demands.

In Canada, the price for a game is the same across the country, whether you're in Ontario or the Yukon (barring GST/PST/HST differences, similar to VAT).

In the US, same deal - it doesn't matter what state you're in, the price of a game is the price of that game.

The article lists some EU member states in the Eurozone and some that aren't - sure, the requirement for currency exchange tends to mean there are winners and losers on the price difference... but isn't the point of the EU the whole 'single market' thing? So set the price of a game in Euro, let non-Eurozone-but-still-EU members buy it for whatever that converts to in their local currency, and otherwise treat the EU as a single 'country'.

Yes, let poor people pay the same so people will migrate to richer zones! \s

The EU is not a single country, it's just a weak union. The EU countries doesn't have a shared tax collection and they wouldn't share it anyway because it would hurt richer countries very badly.


Last edited by lunix at 5 April 2019 at 4:56 pm UTC
Aeder 5 April 2019 at 4:57 pm UTC
KithopGeo-blocking is BS, so for once the EU is in the right of it with their demands.

In Canada, the price for a game is the same across the country, whether you're in Ontario or the Yukon (barring GST/PST/HST differences, similar to VAT).

In the US, same deal - it doesn't matter what state you're in, the price of a game is the price of that game.

The article lists some EU member states in the Eurozone and some that aren't - sure, the requirement for currency exchange tends to mean there are winners and losers on the price difference... but isn't the point of the EU the whole 'single market' thing? So set the price of a game in Euro, let non-Eurozone-but-still-EU members buy it for whatever that converts to in their local currency, and otherwise treat the EU as a single 'country'.

I'd argue a step further and say games should just be priced globally in whatever the local currency of the developer/publisher is (e.g. Yen for Japanese games), and the rest of us pay whatever the equivalent of that is in our currency. The devs/publishers want to be paid in their own currency at the end of the day, right? If people are going to pirate it because they can't afford it, going to all the extra effort to get a pittance fraction of the cost from poorer regions just doesn't seem worth it.

But maybe it is, because the 'actual cost' is mostly fixed, and the reproduction/transmission cost of selling additional copies is next to nil (barring translations, etc.). So a game that sells for $60 in the US might still be worth translating and selling for the equivalent of $5 somewhere else. How much of that $60 is profit vs. the $5? What if the game was just... $20 everywhere in the world?

Global economics is hard. ;) But the internet is global. Artificial barriers will get broken, so it's a difficult proposition to figure out how to position your work so that poorer countries with weaker currencies could still afford and enjoy it, while not taking a chunk out of your earnings in wealthier nations. Maybe the 'cheaper' cost version is still enough to break even or make a little bit of money, and the 'wealthier' costing version is pure profit. Maybe the sales in wealthier countries subsidize the sales in poorer ones (though I doubt it - they'd just not bother offering it for sale in said countries then, right?).

I worry for smaller, Indie devs/publishers trying to get this right. I have no sympathy for the likes of EA/Ubisoft/Activision-Blizzard/etc., though, who abuse the crap out of their employees and give their execs multi million dollar salaries and bonuses.

It's the fact that they sell it for a "pittance" from the point of view of developed countries, that has turned developing countries from nations full of software copyright infringers into millions of paying consumers. Even without translating games into the less spoken languages.

Setting the price globally to 20 USD (or its equivalent in local currency), for example, would just make the company lose potential profit or even incur loss on developed nations while selling nothing on developing countries.
Dunc 5 April 2019 at 5:03 pm UTC
Wait... the EU has concluded that Valve et al are in breach of a regulation it introduced in December 2018 with a policy last used in 2015?

It certainly sounds like the EU all right, but surely I'm missing something here?
riusma 5 April 2019 at 5:05 pm UTC
Hmmmm... I may be wrong (and perhaps misunderstand some comments posted above) but I don't think that this is related to Valve's regional pricing policy (i.e. it has nothing to do with the fact that games on Steam are cheaper in EU member states that are not in Eurozone, which has generally the highest price looking at Steamdb data).
LibertyPaulM 5 April 2019 at 5:07 pm UTC
Geoblocking has been rife across the entertainment industries for years. I hope it won't end here and that Hollywood is next. Somehow I doubt it because, as we have seen from the Copyright Directive, the EC is up Hollywood's arse.
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