Wednesday, January 20th 2021

European Commission Fines Valve, Five Game Publishers in €7.8 Million for Regional Pricing and Geo-blocking Practices

The European Commission has issued a fine to Valve and five game publishers (Bandai Namco, Focus Home Interactive, Capcom, Koch Media, and ZeniMax after an antitrust probe decided the companies violated EU antitrust laws. The Commission investigated regional pricing and geo-blocking practices that were put in place by valve and the hitherto fined publishers, and says that these rule-breaking pricing manipulations resulted from bilateral agreements between game publishers and Valve between 2010 and 2015, as well as from purpose-built licensing and distribution licenses between four out of five fined publishers between 2007 and 2018.

The European Commission found these practices to relieve "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". In particular, the offendants sold video game licenses relative to some 100 different titles at lower pricing in certain Eastern Europe countries, and which could not be activated in Western Europe. The fine's total amount of €7.8 million is shared between Valve (€1,624,000); Bandai Namco (10% fine reduction for cooperation, €340,000); Capcom (15% fine reduction for cooperation, €396,000); Focus Home Interactive (10% fine reduction for cooperation, €2,888,000); Koch Media (10% fine reduction for cooperation, €977,000), and ZeniMax (10% fine reduction for cooperation, €1,664,000). Valve didn't receive any fine reduction because the company elected not to cooperate with the Commission.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said in a statement:
More than 50% of all Europeans play video games. The videogame industry in Europe is thriving and it is now worth over € 17 billion. 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. 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.
Of course, while this money will come directly out of pocket from the convicted companies, what this does in practice is that these companies will likely no longer provide videogames at discounted prices for countries with lower purchasing power (and, one might argue, at pricing that better reflects those citizen's purchasing power, which as we all know, vary from country to country). If history has shown us anything is that companies will almost never take the road of lowering the purchase price towards the lowest bar, but the opposite, thus potentially turning games into luxury commodities that are only reserved for the few lucky enough to have been born in a country with a higher minimum wage.
Source: European Commission
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35 Comments on European Commission Fines Valve, Five Game Publishers in €7.8 Million for Regional Pricing and Geo-blocking Practices

#26
windwhirl
EasoGaben can eat this fine easily. Question is, will Valve try to ignore the ruling? Because EU will not screw around and will have no issue giving out the second one, which would be larger.
Unlikely. Valve and Gaben are not gonna try to ignore the ruling, unless they have a very convincing argument to make in the courts (or wherever they may dispute the fine in Europe), which I don't think they do.
lexluthermiesterI have to disagree. An abuse of power, regardless of the degree to which it was applied, is a serious problem. It needs firm action, leaning on the side of harsh. I don't think the fine was big enough.

Selectively gouging the public is a wildly inappropriate form of discrimination and must NOT be tolerated.
That's fine and I agree with that to a certain point. I just think that fines must be reasonable, not too high nor too low. Remember, when the bean counters see the numbers, the first to go are usually the employees, so that's why it's not a good idea to just rise the fines to the heavens.

On that topic, I actually wanted to know the impact of this fine on the companies involved. Most of these companies are not publicly traded, but there's the Embracer Group that owns Koch Media (among other companies like Saber Interactive, THQ Nordic or Deep Silver). So I dug up the group's latest consolidated income statement (I couldn't find one for Koch Media), which you may findhere, which reports 283.3 million SEK of net profit (or almost 34 million USD). Considering the €977,000 fine (almost 1.2 million USD), that's around 3.5% of profit lost to a fine. I'm not saying it's a lot of money, but it's not as ridiculously low as someone assumed, considering those 34 million USD are the profit of the whole group that owns Koch Media among a bunch of other companies, and in theory this fine is for the transgression of just one of those companies. Suppose that every single one is guilty of the same thing and the fines piling up could make quite the number.

Posted on Reply
#27
lexluthermiester
Solid State Soul ( SSS )Region locked games is the stupidest thing ever.
We can not agree more on this point!
AquinusThank goodness I live in the glorious state of New Hampshire which has no sales or income tax.
Yeah but you have property taxes up the yazoo. No thanks.
Posted on Reply
#28
bobbyrooney
ExcuseMeWtfPretty sure minimum wage earners in such countries have much more pressing issues than AAA games' pricing at/near launch.
Minimum wage earners in such countries cant afford the AAA games in the first place and most likely get it by some other means.
Posted on Reply
#29
PanicLake
ExcuseMeWtfPretty sure minimum wage earners in such countries have much more pressing issues than AAA games' pricing at/near launch.
So minimum wage earners in your opinion have to: work >eat > sleep > work >eat > sleep > work >eat > sleep > work >eat > sleep... forever.
They can't have some fun in life... got it!
Posted on Reply
#30
Readlight
Strange that I need internet to open a game who is already downloaded.
Posted on Reply
#31
ExcuseMeWtf
PanicLakeSo minimum wage earners in your opinion have to: work >eat > sleep > work >eat > sleep > work >eat > sleep > work >eat > sleep... forever.
They can't have some fun in life... got it!
So minimum wage earners in your opinion are doomed to earn minimum wage for the rest of their lives.

And low-cost or f2p games don't exist either.

Got it.
Posted on Reply
#32
Robin Seina
PanicLakeSo minimum wage earners in your opinion have to: work >eat > sleep > work >eat > sleep > work >eat > sleep > work >eat > sleep... forever.
They can't have some fun in life... got it!
Well I live currently below minimum wage from savings and occasional jobs, as parents died to Covid-19 and I still study at university. I play AAA games as sometimes I review for local internet magazine, or buy them at GOG/humble discounts. Steam regional lock/pricing is irritating, but anyway, if the game is at GOG I will prefer it from there anyway (DRM free, local copy etc.)
Posted on Reply
#33
Aquinus
Resident Wat-man
lexluthermiesterYeah but you have property taxes up the yazoo. No thanks.
Depends on the town you live in since things like education is handled by municipalities. Not all towns in NH have terrible property taxes. Usually the less services the town provides, the cheaper property taxes are. FWIW, even with property taxes, I earn enough where I benefit mainly from the lack of state income tax and that outweighs just about everything else.
Posted on Reply
#34
Unregistered
Spain, Slovakia, Greece and Italy got effed by getting the euro, but that's obviously not the peoples fault for voting for an oligarchy that only wants what's best for themselves. Why the Baltic states belong with the former USSR is anyone's guess.... actually not really, you can ask the Russians yourself and their super secret deluxe deals which is why other people will often shove you into the same boat, especially with online games.

Same with devs/publishers blocking certain games from being accessed in XYZ country with certain "features" like where lootboxes are the main attraction/game loop are more or less banned in the Netherlands and Belgium. But that's obviously not their fault nor the country itself but Valve because reasons.

I'm more keen on seeing double taxation become the norm (as is so popular here in Sweden) because of communism and the Swedish people who support the idea (Arne Weise Syndrome as I like to call it), and obviously the state who wants more than just a piece of that pie. Gonna look forward to that 25+25% VAT + import tax on e-goods because potato. At least it won't ever get any more funny like as to why the Japanese prices are always so sky high due to the console manufacture monopoly policy (i.e Sony) of having total control hence why publishers are forced to jack up the prices or else, therefor "forcing" people to buy em cheaper from them instead.
Posted on Edit | Reply
#35
mechtech
Good.

I went to buy some buddies a game at Christmas they live in US I'm in Canada. Valve blocked it cause more than 1 dollar difference. Ridiculous.
Posted on Reply
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