European Commission levies $9.5 million in fines for ‘geo-blocked’ Steam games

Valve and five PC video game publishers have been fined a total of €7.8 million (around $9.5 million) by the European Commission for restricting cross-border game sales in the European Economic Area. The Commission said that the companies geo-blocked around 100 PC video games, preventing them from being activated and played outside certain EU countries. This broke the EU’s Digital Single Market rules which prohibit those types of barriers.

The European Commission says the geo-blocking was used to prevent games being activated outside Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia, and Lithuania. Geo-blocking prevents gamers living in EU countries with higher average incomes from being able to save money buying them in EU states where they’re cheaper and then activating them on Steam. The fines do not relate to games sold directly on Steam, but to games sold through third-party sellers that can be activated on Steam. Steam activation keys were geo-blocked between 2010 and 2015, the European Commission said.

Margrethe Vestager, executive vice-president in charge of competition policy, issued a statement noting that the fines should remind publishers that geo-blocking is not allowed in the European Union.

“More than 50% of all Europeans play video games. The videogame [sic] 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.”

The five publishers had their fines reduced between 10 and 15 percent for cooperating with the Commission’s investigation. Valve chose not to cooperate and received an unreduced penalty of more than €1.6 million ($2 million).

Valve has not commented on the Commission’s action. However, when the EC asked the company to stop the practice last year, Valve told The Verge in a statement that only “a small number of games” (about 3 percent) were geo-blocked. It explained that with limited exceptions, it turned off geo-blocking in European regions in 2015. It further argued that it should not be held responsible for publishers that use region-locked activation since it does not directly sell Steam keys.

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