EC sends Statements of Objections to Valve and five publishers on "geo-blocking" of PC video games

dgz

dgz

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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.

Commissioner Margrethe Vestager, in charge of competition policy, said: "In a true Digital Single Market, European consumers should have the right to buy and play video games of their choice regardless of where they live in the EU. Consumers should not be prevented from shopping around between Member States to find the best available deal. Valve and the five PC video game publishers now have the chance to respond to our concerns."

The Commission has addressed Statements of Objections to Valve, owner of the world's largest PC video game distribution platform called “Steam”, and five PC video game publishers, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.

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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.

* 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.
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You can read the whole press release and make up your own mind. Personally, I welcome their pushes towards a real digital single market. But as someone who has worked with some of these publishers (and dealt with people), I know they simply will not do the right thing on their own.
 
But what about differences of opinions like loot boxes you don't want loot boxes in your country maybe they don't want to sell their game in your country and then there's differences of opinions on content restrictions if one country wants some things restricted for their people then there has to be a separate version like well China

I mean I'm not one for restrictions but I can see the reason why they would have such restrictions
 
lostinseganet said:
But what about differences of opinions like loot boxes you don't want loot boxes in your country maybe they don't want to sell their game in your country and then there's differences of opinions on content restrictions if one country wants some things restricted for their people then there has to be a separate version like well China

I mean I'm not one for restrictions but I can see the reason why they would have such restrictions
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Yeah, this sis difficult. How do you both comply with the "one European market" rules, while also complying with local member states regulations on various aspects of games?

This would have the effect that if one member states bans something it now has to be removed from all of Europe because they can't geoblock.

I don't think the European Commission intended this to be the effect. This is why the EC has so many common product regulations superceding member states regulations, because you can't have a common market in which everyone makes their own rules.

Maybe it is time for Europe to come up with a Game Directive superseding local me very state laws.

Also, Steam tends to have local pricing, selling games for less money in less wealthy countries. Removing geo-considerstions means that poor kids in Eastern Europe will be forced to pay the same for titles as their reöatively wealthy counter-parts in Germany. Because you can't have different market pricing without geoblocking. That would just mean that everyone in the common market would buy all of their titles in the cheapest country...
 
lostinseganet said:
But what about differences of opinions like loot boxes you don't want loot boxes in your country maybe they don't want to sell their game in your country and then there's differences of opinions on content restrictions if one country wants some things restricted for their people then there has to be a separate version like well China

I mean I'm not one for restrictions but I can see the reason why they would have such restrictions
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Give them all restricted German versions of games and charge them Norwegian prices. Easy.
 
I think there is an easy workaround for this -

Let them buy the "game" and instead of blocking activation/sales via GeoIP they activate different features based on the key

Eg: You buy a romania key for $, you get the first 5 levels included, the rest is DLC
You buy the german key for 2*$ you get the full game
 
/dev/null said:
I think there is an easy workaround for this -

Let them buy the "game" and instead of blocking activation/sales via GeoIP they activate different features based on the key

Eg: You buy a romania key for $, you get the first 5 levels included, the rest is DLC
You buy the german key for 2*$ you get the full game
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Yeah, but what's to stop so done I. Germany from buying the Romanian key? This is kind of at the heart of the EC's argument here. They want the same thing to be sold to everyone in Europe.
 
dgz said:
You can read the whole press release and make up your own mind. Personally, I welcome their pushes towards a real digital single market. But as someone who has worked with some of these publishers (and dealt with people), I know they simply will not do the right thing on their own.
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Can you say that each and every EU member state has the same duties and tariffs on the content, that some do not charge the publishers more than others, thereby being themselves the actual source of the price differences? Or that it's their policies that make it undesirable to do business in their country.

On the one hand I'm going to stick my hand in your pocket, and on the other I'm going to cry to big brother EU and cry that you are being unfair.

I run on the assumption that businesses want to make money, that to do so, they normally need to engage in commerce. And therefore, geoblocking content is only profitable if someone is trying to screw me.

Still, if in another scenario, I charge more in countries with higher costs of living because that market can bear the higher price tag, and cheaper in poorer countries, and I use geoblocking to keep the people from the wealthier countries from buying via the poor countries. I'm not sure I disagree with this at all.

OK, after more careful reading it just looks like a money grab. This law is four months old and doesn't pertain to downloads. But they want to send out a warning that they are considering pursuing downloads as well, although there is an existing plan to do an assessment of the law later, (in March 2020), and in light of the fact that if they find Steam and these other companies in violation of this law, they can go after "up to 10% of a company's annual worldwide turnover."

I mean WTF? The balls on these assholes.
 
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European consumers should have the right to buy and play video games of their choice regardless......
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wow, whose talking about buying VIDEO games?

Steam/valve only sells Loicenses that europe loves so much. they would never sell 'a game'.
 
More EU shenanigans designed to tax & control companies by setting the bar and establishing precedent. There are a lot of smart people thinking this shit up to fool the average person. They use an ancient strategy called 'just the tip, I swear'. Today its price (sounds good), tomorrow it'll be content, higher taxes and fines.
 
EU seems to be trying to have things both ways here....

They want the digital stores to sell to ALL of the EU.... but they let individual EU countries pass laws that force the digital stores to have multiple versions of their games to comply with those laws.

The EU is a huge pain in the ass for the most part. A bunch of countries pretending to be united or sovereign when it suits them.
 
I seem to recall years back that steam didn’t geolock and people did in-fact use that to take advantage of lower pricing or uncensored versions of the games. (Australia, Germany)

I’m fairly certain there was pressure on them to change that. I also remember people bitching about the fact that in the UK Steam defaults to the Euro so they end up paying more digitally after converting from Pounds.
 
I can more easily understand the case for region-locking sales of games than I can for region-locking the playability of games such as ActiVision does. I hope that the EC doesn't just look at these two restrictions as one thing and that they put a stop to region-locking the playability of games. Someone who buys a game while they're in one country shouldn't lose the ability to play their game if they're vacationing in another country or if they later move to another country.
 
lcpiper said:
Can you say that each and every EU member state has the same duties and tariffs on the content, that some do not charge the publishers more than others, thereby being themselves the actual source of the price differences? Or that it's their policies that make it undesirable to do business in their country.

On the one hand I'm going to stick my hand in your pocket, and on the other I'm going to cry to big brother EU and cry that you are being unfair.

I run on the assumption that businesses want to make money, that to do so, they normally need to engage in commerce. And therefore, geoblocking content is only profitable if someone is trying to screw me.

Still, if in another scenario, I charge more in countries with higher costs of living because that market can bear the higher price tag, and cheaper in poorer countries, and I use geoblocking to keep the people from the wealthier countries from buying via the poor countries. I'm not sure I disagree with this at all.

OK, after more careful reading it just looks like a money grab. This law is four months old and doesn't pertain to downloads. But they want to send out a warning that they are considering pursuing downloads as well, although there is an existing plan to do an assessment of the law later, (in March 2020), and in light of the fact that if they find Steam and these other companies in violation of this law, they can go after "up to 10% of a company's annual worldwide turnover."

I mean WTF? The balls on these assholes.
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I think they're trying to enforce similar rules for everyone, despite (or likely because) the obvious fact that people will very likely use the cheapest and most convenient option that is available to them.

Now, since geo-blocking is a definite no-no, that leaves actual competition between companies operating throughout the continent. Under the same common rules. Which, shockingly, includes treating your customers the same. Isn't this what capitalism is all about?

What you're doing is clinging to the old model. They don't want the old model. I don't want the old model.

Disclaimer: I used to work for a guy that made good money because he had exclusive deals with all major game publishers. Once we joined the EU that model was no longer sustainable because it allowed others to compete. How is that a bad thing?
 
Geoblocking? What is that? Is is like when you cannot use a DVD from the UK on a US player, other than the PAL support thing, I mean?
 
ManofGod said:
Geoblocking? What is that? Is is like when you cannot use a DVD from the UK on a US player, other than the PAL support thing, I mean?
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that's region coding.

geo blocking is stopping me from watching adult swim episodes or youtube videos or HBO on the internet because some asshole here in canada owns the rights to it so they get to decide how it gets distributed.

the EU is confusing geoblocking with a pricing model based on income inequality IMO.

steam prices are lower where things are cheaper. basically the EU wants their cake and to eat it too.
 
ManofGod said:
Geoblocking? What is that? Is is like when you cannot use a DVD from the UK on a US player, other than the PAL support thing, I mean?
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Yeah. ActiVision does it with their newer games. For example, if you Buy Call of Duty Infinite Warfare or Black Ops 4 in region 1, you can't play it from other regions. So, you can't play it on vacation in another region or if you move ti another country in another region. You'd have to buy the game again from the new region to be able to play it from there.


Master_shake_ said:
that's region coding.

geo blocking is stopping me from watching adult swim episodes or youtube videos or HBO on the internet because some asshole here in canada owns the rights to it so they get to decide how it gets distributed.

the EU is confusing geoblocking with a pricing model based on income inequality IMO.

steam prices are lower where things are cheaper. basically the EU wants their cake and to eat it too.
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The term might be confused, but it works out to be the same effect, which is limiting access to media based on region.

There are 2 parts to the EC position, though: The ability to purchase and activate games across different regions, and the ability to play them across regions.
 
Go after streaming providers, that would at least make sense. Games are geolocked so they can sell them cheaper in low wage countries, where otherwise people couldn't buy it. This will only result in them selling it at the higher price everywhere basically fucking over people in low income areas.
 
So have there ever been games banned in one EU country but not all of them? If so, the EU commission needs to seriously STFU about this.
 
Zarathustra[H] said:
Yeah, this sis difficult. How do you both comply with the "one European market" rules, while also complying with local member states regulations on various aspects of games?
.[/QUOTE}

Yea, seems like they have to hash some more things out before they can move forward with attempting this.
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Valve just sent out a statement, here's what they said in full for those interested:
https://www.gamingonlinux.com/artic...for-geo-blocking-a-statement-from-valve.13903

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.
 
PeaKr said:
More EU shenanigans designed to tax & control companies by setting the bar and establishing precedent. There are a lot of smart people thinking this shit up to fool the average person. They use an ancient strategy called 'just the tip, I swear'. Today its price (sounds good), tomorrow it'll be content, higher taxes and fines.
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its what the EU does... they have stifled innovation so they regulate access to the internal market. The EU has always been about protecting internals. The red-herring of "would a company just walk away from 1/2 Billion customer" is a stupid argument to tolerate such behaviour
 
can't wait to see how things transpire for the EU after Brexit is passed
 
dgz said:
I think they're trying to enforce similar rules for everyone, despite (or likely because) the obvious fact that people will very likely use the cheapest and most convenient option that is available to them.

Now, since geo-blocking is a definite no-no, that leaves actual competition between companies operating throughout the continent. Under the same common rules. Which, shockingly, includes treating your customers the same. Isn't this what capitalism is all about?

What you're doing is clinging to the old model. They don't want the old model. I don't want the old model.

Disclaimer: I used to work for a guy that made good money because he had exclusive deals with all major game publishers. Once we joined the EU that model was no longer sustainable because it allowed others to compete. How is that a bad thing?
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Wait up, there must be a reason the same content is being sold for different prices in different countries. In a perfect world, that reason would be linked to costs, and the markets in those countries.

I'll be editing this post, see what I can dig up.

OK, that took all of one minute;
How does VAT work in Europe?
The European Union value added tax (or EU VAT) is a value added tax on goods and services within the European Union (EU). ... Different rates of VAT apply in different EU member states, ranging from 17% in Luxembourg to 27% in Hungary.
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https://en.m.wikipedia.org/wiki/European_Union_value_added_tax

So the EU wants it both ways, and fuck the online business.

And what will happen is, Steam and others will simply start charging all outlets at the highest VAT Tax rate, brilliant.
 
lcpiper said:
Wait up, there must be a reason the same content is being sold for different prices in different countries. In a perfect world, that reason would be linked to costs, and the markets in those countries.

I'll be editing this post, see what I can dig up.

OK, that took all of one minute;

https://en.m.wikipedia.org/wiki/European_Union_value_added_tax

So the EU wants it both ways, and fuck the online business.

And what will happen is, Steam and others will simply start charging all outlets at the highest VAT Tax rate, brilliant.
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Not sure what you're trying to say here. What does VAT have to do with the topic? I also don't get the "trying to have it both ways". Both ways WHAT? You guys seem kind of crazy. Do they put some crazy right winger shit in your water or what?
 
dgz said:
Not sure what you're trying to say here. What does VAT have to do with the topic? I also don't get the "trying to have it both ways". Both ways WHAT? You guys seem kind of crazy. Do they put some crazy right winger shit in your water or what?
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No, not crazy, but after thinking it through VAT may not have the impact I initially though. So I will have to keep looking for an explanation of why Steam would charge more for the product in one country than in another. I was thinking of VAT as an additional cost to the seller, but no, that would only be a charge to the buyer and shouldn't effect Steam's costs.

Lombardi,(Valve), claimed that without the ability to geo-block games in the EU, publishers will have to raise prices in “less affluent regions” to avoid people in more affluent regions buying games there rather than at home. Traditionally, prices on Steam vary from region to region.
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https://motherboard.vice.com/en_us/article/panj7v/the-eu-is-pissed-at-steam-for-region-locking-games

If VAT is based on the buyer's location, and if Valve and the Publishers are forced to stop Geo-locking titles, to limit sales to regions, then the prices will go up everywhere, the Publishers will lose sales and probably their customer base because entire regions will get priced out of gaming. Prices go up where it's currently cheaper, and people from wealthier countries will have no advantage anymore in "shopping around".

Geo-locking titles encourages people to use VPN, which hides their location, which effects which countries collect the VAT taxes.

It's OK if I am wrong on this, but please explain why instead of just insulting me. I'm just trying to understand why because on the surface this looks crazy, therefor there must be a reason that makes sense.
 
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lcpiper said:
No, not crazy, but after thinking it through VAT may not have the impact I initially though. So I will have to keep looking for an explanation of why Steam would charge more for the product in one country than in another. I was thinking of VAT as an additional cost to the seller, but no, that would only be a charge to the buyer and shouldn't effect Steam's costs.
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They don't. This seems to be about Valve facilitating geo-blocking of certain keys (groups of keys) via their platform. It's not about forcing Valve or anyone to sell games at a fixed price
 
dgz said:
They don't. This seems to be about Valve facilitating geo-blocking of certain keys (groups of keys) via their platform. It's not about forcing Valve or anyone to sell games at a fixed price
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I think my explanation is clearer above, prior to your reply here.
 
lostinseganet said:
But what about differences of opinions like loot boxes you don't want loot boxes in your country maybe they don't want to sell their game in your country and then there's differences of opinions on content restrictions if one country wants some things restricted for their people then there has to be a separate version like well China

I mean I'm not one for restrictions but I can see the reason why they would have such restrictions
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The solution is to enforce the law from the one state to everywhere. So if loot boxes are illegal in one state, steam can't offer them in any state.
 
lcpiper said:
I think my explanation is clearer above, prior to your reply here.
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Please excuse my horrible soft skills.

Now. I don't think this is about VAT. I think this is about keys meant for retailers in poor EU countries that are being blocked here. Thing is, you don't get to buy those at Steam. Regional pricing has always been a thing. It's been a while but European Steam prices were noticeably lower. It used to be a 60 dollar game was NOT sold for 60 euro on steam. No, they used to convert that amount to your currency. Don't remember when but it did happen. That was before that near permanent sale state that we're used to now. All big publishers effectively raised their prices just like that.

Don't like the concept of VAT myself but this is not about it. People used to get proxies or VPN to Russia for the incredible Origin prices. It's just that publishers generally would prefer money instead of piracy so they sell cheaper batches of keys to poorer regions. They don't like those keys been resold and pull the geo-blocking trigger.

I don't have a better explanation but honestly think mine is better than PC gamer's article
 
dgz said:
Please excuse my horrible soft skills.

Now. I don't think this is about VAT. I think this is about keys meant for retailers in poor EU countries that are being blocked here. Thing is, you don't get to buy those at Steam. Regional pricing has always been a thing. It's been a while but European Steam prices were noticeably lower. It used to be a 60 dollar game was NOT sold for 60 euro on steam. No, they used to convert that amount to your currency. Don't remember when but it did happen. That was before that near permanent sale state that we're used to now. All big publishers effectively raised their prices just like that.

Don't like the concept of VAT myself but this is not about it. People used to get proxies or VPN to Russia for the incredible Origin prices. It's just that publishers generally would prefer money instead of piracy so they sell cheaper batches of keys to poorer regions. They don't like those keys been resold and pull the geo-blocking trigger.

I don't have a better explanation but honestly think mine is better than PC gamer's article
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So what you are saying explains why the people are "shopping around", and it explains why Steam and the Publishers are geo-blocking. But what is the explanation for the EU's warnings to Steam and the Publishers.

The EU’s regulations around unjustified geo-blocking came into force in 2018 and cover games released on physical media, but not digital downloads. The regulation is due for a review in 2020.
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https://motherboard.vice.com/en_us/article/panj7v/the-eu-is-pissed-at-steam-for-region-locking-games

Unjustified is the word used in this article. I do not yet know the definition or limits on this word as it relates to the regulation involved. Steam claims that the justification for pricing decisions is largely based on differences in regional economies. Geo-Blocking itself can be a separate matter. The EU has not tried to eliminate or ban geo-blocking, so they acknowledge that their are legitimate reasons for the practice that they presumably support.

I can't help but wonder, what the deal is. Are prices in the wealthier countries so unreasonable? On it's face, it seems that lower prices in poorer countries is completely reasonable as the only way to encourage sales to these markets. Markets that simply could not stand pricing comparable to wealthier regions. I don't believe Steam and the Publishers deserve praise for a common sense business decision, I am not blinded thinking that the cheaper prices are charity and good will. But I also do not think that all the people in the EU deserve the same cut rate pricing as many are wealthy enough to afford what the producer is asking for their product.

I just can't help working out the numbers, the inescapable result of this move by the EU. What will be the outcome? If forced to stop geo-blocking, what will Steam do? Lower prices everywhere in the EU, raise them and write off the poorer markets? Find a middle ground in pricing? Or will they look at the severe threat in the EU's punishments and abandon the EU as a marketplace entirely? Is it a money grab? What is it about what Steam is doing that is driving this action? That is what I am concerned with.
 
lcpiper said:
So what you are saying explains why the people are "shopping around", and it explains why Steam and the Publishers are geo-blocking. But what is the explanation for the EU's warnings to Steam and the Publishers.


https://motherboard.vice.com/en_us/article/panj7v/the-eu-is-pissed-at-steam-for-region-locking-games

Unjustified is the word used in this article. I do not yet know the definition or limits on this word as it relates to the regulation involved. Steam claims that the justification for pricing decisions is largely based on differences in regional economies. Geo-Blocking itself can be a separate matter. The EU has not tried to eliminate or ban geo-blocking, so they acknowledge that their are legitimate reasons for the practice that they presumably support.

I can't help but wonder, what the deal is. Are prices in the wealthier countries so unreasonable? On it's face, it seems that lower prices in poorer countries is completely reasonable as the only way to encourage sales to these markets. Markets that simply could not stand pricing comparable to wealthier regions. I don't believe Steam and the Publishers deserve praise for a common sense business decision, I am not blinded thinking that the cheaper prices are charity and good will. But I also do not think that all the people in the EU deserve the same cut rate pricing as many are wealthy enough to afford what the producer is asking for their product.

I just can't help working out the numbers, the inescapable result of this move by the EU. What will be the outcome? If forced to stop geo-blocking, what will Steam do? Lower prices everywhere in the EU, raise them and write off the poorer markets? Find a middle ground in pricing? Or will they look at the severe threat in the EU's punishments and abandon the EU as a marketplace entirely? Is it a money grab? What is it about what Steam is doing that is driving this action? That is what I am concerned with.
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You're once again operating under false assumptions. The EU is absolutely trying to kill off geo-blocking. Instead linking articles you haven't read, you should start here
https://ec.europa.eu/digital-single-market/en/policies/shaping-digital-single-market

Here's the very first sentence
The Digital Single Market denotes the strategy of the European Commission to ensure access to online activities for individuals and businesses under conditions of fair competition, consumer and data protection, removing geo-blocking and copyright issues.
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Second. As evident from Steam itself and the PC gamer article that you linked earlier, they don't have prices for each country. That would be stupid. As I said, this is most likely about blocking keys sold to e/retailers.

To me the logic is simple. So what if I bought a cheaper game from some place else. It's not my fault the game is being distributed via Steam and that makes it subject to the digital single market rules. So, you see, it's the publishers (I don't think those same rules apply to physical items) and the users who are trying to have their cake, and eat it too. Everyone is trying to make the best out of the situation.
 
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