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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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bgh251f2 5 April 2019 at 5:11 pm UTC
KithopGeo-blocking is BS, so for once the EU is in the right of it with their demands.

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.

I don't think you understand the difference that is regional pricing around the world, and how much impact it made on improving the amount of legal games sold in places like Brazil. $20 rigth now is equivalent to R$80-R$100 in the local currency, but the way our economy is it can change 20% this afternoon. It would rend events like sales impossible. A product can have 15% of discount and be more expensive than it was the day before the discount came.
lunix 5 April 2019 at 5:16 pm UTC
riusmaHmmmm... 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).

Games are not cheaper in EU member countries that are not in the eurozone - that's the problem, the *lack* of sufficient regional pricing.
riusma 5 April 2019 at 5:27 pm UTC
lunixGames are not cheaper in EU member countries that are not in the eurozone - that's the problem, the *lack* of sufficient regional pricing.

Sorry, you're right (read steamdb data far too quickly)! In which currency peoples from countries that are EU members but not in Eurozone buy their games on Steam?


Last edited by riusma at 5 April 2019 at 5:43 pm UTC
eldaking 5 April 2019 at 5:29 pm UTC
The issue is complicated. Regional pricing is an absolute necessity in many places; not having it can be effectively "not available in this region". The technical measures used to implement it, however, are basically DRM, and thus have serious implications.

In this case in particular, I kind of agree the point the EU is making. Within the EU, there shouldn't be limitations on "exporting" games, even if this affects the ability to offer a "more fair price". Also, many countries already use the same currency, which is one less concern (exchange rates rarely reflect purchasing power, but besides that it can fluctuate a lot which is a big problem). But I hope that Valve can figure out a better solution so that people in those countries aren't screwed by a corner case of international trade deals... since it apparently only affects key reselling, perhaps by limiting their policy in issuing keys they could keep the fair prices for purchases in the actual store?

Of course, ideally we could have a single price worldwide and no trade restrictions. But first we would need to figure out how to solve all the inequality in the world. The idea that you could just price a product in dollars and sell it worldwide is naive at best.
chancho_zombie 5 April 2019 at 5:42 pm UTC
everyone seems to forget that there are some countries that belong to the EU but don't have the same currency. not the same currency = not the same price, seems fair.


Last edited by chancho_zombie at 5 April 2019 at 5:43 pm UTC
x_wing 5 April 2019 at 6:00 pm UTC
(I think that the best answer is @Aeder one, but I'll try to contribute with some technical words)

KithopBut 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?

This is software and the marginal cost tends to be zero. So, publishers can sell at lower price in poorer countries by the fact that they should only care the maximize the function sell-price * sales-count on each country. In other words, the price you get for software is not linearly related with the cost of development but with how much the people in your area is able to pay for it.
dubigrasu 5 April 2019 at 6:00 pm UTC
Well, I wouldn't mind a bit of adjusting to local wages, because here in E-Europe, I pay ten times more for a game, than say, an US citizen.
Purple Library Guy 5 April 2019 at 6:17 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'.
But the EU isn't a single country. It does not act fiscally, budgetarily, or in terms of many regulations, like a single country. It does not have EU-wide public pension plans paying the same amount across the region, it does not have EU-wide minimum wage laws, it does not have EU-wide unemployment insurance, it does not have payments moving between wealthier and poorer states to try to equalize their economic situation (if anything the reverse--it has EU-mandated rules redistributing the wealth of poorer states to the banks of richer ones). In the absence of these sorts of fiscal provisions to pull the economy of the region together, the Euro actually tends to broaden economic disparities in the Eurozone by worsening the economies of the poorer states, because it deprives them of a lot of fiscal tools needed more by the poorer states that go with control over one's own currency. Like devaluation to encourage exports, and stuff.

I'm not sure of my position on this, but using actual countries as an analogy to the EU is a poor argument for whichever side and as a side effect leads to a misunderstanding of the nature of the EU.
Dedale 5 April 2019 at 6:31 pm UTC
chancho_zombieeveryone seems to forget that there are some countries that belong to the EU but don't have the same currency. not the same currency = not the same price, seems fair.

I would rather say that different countries in the EU have different buying power hence the different prices. It is not directly linked to the currency. Some poorer EU members use the Euro.
FirearmsUnited 5 April 2019 at 7:41 pm UTC
You're all doing it wrong. Let me explain this from a very simple economist point of view:

I don't know how old or young most of you are but the older ones among us will remember how almost all the big companies, especially those that used manual labour or first level it-support, moved to eastern Europe or even further to India, China, Taiwan, and so on, forcing many long time employees into unemployment.

Our politicians and the media called this "globalisation". They told us that this is inevitable and that we must adapt to it. Still it will benefit us all in the long run because the same way how work force can be bought and sold globally for the best price, we the consumer will also profit from lower prices because we as well are allowed to buy and sell goods from all over the world for the lowest price possible.

We all now that custom duties often make this promise a stale one but after around 10-20 years we actually are able to buy goods directly from Shenzhen or Hong Kong for a reasonable price even with custom duties paid. Still only a fraction of consumers is actually using this option. Most people buy the same products for a huuuuuge mark-up at their local distributors. This makes companies happy because they enjoy giant profit margins

Now for a couple of years digital goods have risen to an insane amount of popularity. The major benefits from them are (among others) no custom duties and instant delivery from all over the world directly to your client devices. It's actually so very easy that many more people are using their right to do so. And why not? They also suffer from the downsides of globalisation. This is their promised compensation. However this makes companies that sell mainly digital goods nervous. Now they don't earn (as much) giant profit margins as in the past. So they install geo blocking and thus destroy the already very lacking balance in globalisation to further the disadvantage of the normal consumer.

Remember: We are only talking about EU wide geo blocking! Actually we should have the right to buy our digital goods from countries like India or Trinidad and Tobago since the companies that are producing those digital goods have also the right to safe a lot of money by not produce these goods in our countries and they make extensive use of it.

So everyone who is defending geo blocking in this thread does either not know or understand about the concepts of globalisation or should ask themselves why they are willingly accepting all the downsides of globalisation without demanding at least a tiny bit of fairness in their own favour by being allowed to participate in the same global market like the companies that try to deny them this right.


Last edited by FirearmsUnited at 5 April 2019 at 8:08 pm UTC
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