Europe Investigates Valve over Steam Geo-Blocking

The European Commission (EC) is opening an antitrust investigation into Valve’s game distribution platform Steam to determine if its content geo-blocking is in breach of European Union (EU) law. Valve’s relationship with developers Bandai Namco, Capcom, Focus Home, Koch Media, and ZeniMax – the latter of which was recently awarded half-a-billion dollars in damages following a lawsuit against Oculus over stolen VR technology – and the difference in price of its games, in the form of Steam activation keys, across different countries, and which countries those keys are eligible for activation in, will come under scrutiny.

The EC writes:

“After the purchase of certain PC video games users need to confirm that their copy of the game is not pirated to be able to play it. This is done with an “activation key” on Valve’s game distribution platform, Steam. This system is applied for a wide range of games, including sports, simulation and action games.

The investigation focuses on whether the agreements in question require or have required the use of activation keys for the purpose of geo-blocking. In particular, an “activation key” can grant access to a purchased game only to consumers in a particular EU Member State (for example the Czech Republic or Poland). This may amount to a breach of EU competition rules by reducing cross-border competition as a result of restricting so-called “parallel trade” within the Single Market and preventing consumers from buying cheaper games that may be available in other Member States.

The Commission is carrying out this in-depth investigation on its own initiative.”

Valve is yet to comment on the EC investigation.