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EU Commission accuses six game companies of illegal geo-blocking

Valve, Bandai Namco, Capcom, Focus Home, Koch Media, and ZeniMax could be fined up to 10% of annual worldwide turnover if found in violation

The European Union Commission has informed six major video game companies that they may be in violation of EU competition rules.

It is the Commission's "preliminary view" that Valve, Bandai Namco, Capcom, Focus Home, Koch Media, and ZeniMax prevented consumers from purchasing games cross-border from other EU member states.

In a statement released today, the Commission suggested that Valve entered bilateral agreements with the publishers to geo-block their games.

If the companies are found in violation, the Commission can issue a fine worth up to 10% of their annual worldwide turnover.

However, the Statement of Objections is just the Commission's first step to investing suspected violations.

Once the concerned parties have been informed, they are able to examine the Commission's investigation file, reply in writing, and request an oral hearing to present their comments on the case before the Commission and national competition authorities.

"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," said commissioner in charge of competition policy, Margrethe Vestager.

"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."

In a public statement, Koch Media claimed the proceedings date back to business performed before 2015.

"Koch Media will monitor the process closely and is fully committed to comply with all rules and regulations," it added.

ZeiMax meanwhile said it is company policy not to comment on ongoing legal matters.

The four other companies in question did not respond to GamesIndustry.biz in time for publication.

Update: Valve released a statement addressing the EU Commission's allegations, emphasizing that the charges aren't related to the sale of PC games on Steam.

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."

Additional reporting by Brendan Sinclair

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