Valve loses a court case in the EU and has to pay 1.6 million euros in fines for geoblocking
Valve loses a court case in the EU and has to pay 1.6 million euros in fines for geoblocking
The General Court of the European Union has upheld the decision to impose a fine for geo-blocking on Valve Corp. which owns the Steam digital game
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Valve was fined €1.6 million ($1.7 million) for obstructing the sale of certain PC video games outside Europe. However, the company pleaded not guilty.
Wait, outside Europe?
Some countries make it illegal to buy certain video games. If Valve can't geoblock sale of them outside Europe, how are they supposed to conform with both sets of laws?
I remember that the EU didn't want country-specific pricing inside the EU, and had some case over that. That I get, because I can see the EU having an interest in not wanting it creating problems for mobility around the EU. But I hadn't heard about the EU going after vendors for not selling things outside Europe.
Okay this article is shittily worded and the Bloomberg article it links to is paywalled so I found this which goes into much greater detail.
TLDR: Valve and five other publisher's were blocking activation of keys sold to people/distributors from distributors/vendors who purchased them from cheaper regions.
Ah yes, that thing my brother likes to do where he VPNs into another country and then buys them at the greatly reduced local prices.
Guess they were attempting to crack down on purchase frauds and legitimate buyers got burned too?
It was punishing the consumer rather than the distributors abusing the regional pricing.
Yes, but it was the part they have control over. The alternative is not having regional pricing allowing lower income countries to buy games at all.
The article is shit. In the official response they talk about the following countries, none of them is outside Europe: Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania
https://ec.europa.eu/commission/presscorner/detail/en/IP_21_170
I think they meant sale of region specific games not being available to EU citizen living outside Europe
But retail law attaches to a location, not to citizenship. Why would the EU be mandating sale of things in other regions? I mean, it's not like the US says "if an American citizen is living in the EU, then vendors operating in the EU must follow American retail law when selling to him".
EDIT: Okay, I went looking for another article.
Steam specifies in its terms of use that it is prohibited to use a VPN or equivalent to change your location on the platform. Except that it takes the case of the activation of a game given to you by someone and sent to your account. Following Europe’s decision, this should technically change and it would be possible to change region in Steam directly to buy a game then activate it in France. Valve has not made a comment at this time.
Hmm. Okay, if that is an accurate summary -- and I am not sure that it is -- that seems like the EU is saying "you must be able to use a VPN to buy something anywhere in the world, then activate it in Europe". Yeah, I can definitely see Valve objecting to that, because that'd kill their ability to have one price in the (wealthy) EU and one in (poor) Eritrea, say. Someone in France would just VPN to Eritrea, buy at Eritrean prices, and then use it in France. The ability to have region-specific pricing is significant for digital goods, where almost all the costs are the fixed development costs.
thinks
If that is an accurate representation of the situation, that seems like it'd be pretty problematic for not just Valve, but also other digital vendors, since it'd basically force EU prices to be the same as the lowest prices that they could sell a digital product at in the world. I don't know how one would deal with that. I guess that they could make an EU-based company ("Valve Germany") or something that sells in the EU, and have a separate company that does international sales and does not sell in the EU.
I mean, otherwise a vendor is either going to not be able to offer something in Eritrea (using it as a stand-in for random poor countries), is going to have to sell it at a price that is going to be completely unaffordable to Eritreans, or is going to have to take a huge hit on pricing in the EU.
I'm a little suspicious that this isn't a complete summary of the situation, though; that seems like it'd create too many issues.
EDIT2: Though looking at my linked-to article, it seems to be that the author is saying that that's exactly what the situation is.
That's not quite the situation here. The EU is preventing price discrimination within the EU. Price discrimination is generally disallowed in the EU single market. This is intended to foster greater synergies and efficiencies of scale, as opposed to current international trade agreements which are slow to form, and even slower to update as necessary. Part of the single market is the requirement that products and services not discriminate solely on the basis of nationality. Companies are permitted to charge differing amounts based on location and channel, but every consumer in the EU must have the right to purchase that product or service at that location or channel for the same price.
The single market has been one of the major economic drivers for success in the EU, ensuring poor countries have been able to quickly catch up with developed nations. Poor nations can charge developed nation prices for their products and services without risk of systemic barriers or anti-competitive arbitrage. Software is no different. Harmonised access maximises competition, promotes growth, and keeps aggregate prices low. The cost is that prices will rise in some EU nations, as they fall in others.
The EU is preventing price discrimination within the EU.
They do have that requirement as part of the Digital Markets Act, but I don't believe that that's what the case here is addressing. That is not what the article OP posted or the article I linked to is saying: they are specifically saying that what is at issue is sales outside Europe.
EDIT: I am thinking that maybe the article is just in error. I mean, just from an economic standpoint, the EU doing this would create a major mess for international companies.
EDIT2: Okay, here's an archive.ph link of the original Bloomberg article:
https://archive.ph/JuM0z#selection-4849.212-4863.277
In the contested arrangement with Valve, users were left unable to access some games that were available in other EU nations.
Yeah, so it's just that these "mezha.media" guys mis-summarized the Bloomberg article.
Your edits are correct. The mezha.media site most likely misinterpreted the presser.
This is the 2021 ruling if you'd like more info. Valve just lost the appeal.