Valve is being investigated by the European Commission over 'suspected anti-competitive practices'

The European Commission has today opened three investigations into practices where it believes companies are trying to prevent customers from benefiting from cross-border purchases. Alongside consumer electronics and hotel accommodation, videogames are being looked into—the commission is specifically investigating whether or not companies are "breaking EU competition rules by unfairly restricting retail prices or by excluding customers from certain offers because of their nationality or location."

A press release issued by the European Commission suggests that while a number of regulatory barriers have scope to hinder cross-border sales, the investigation aims to target retailers who accentuate said barriers themselves. The Commission suggests that certain companies may do so in order to "fragment the EU's Single Market along national borders" which in turn prevents competition. The investigation hopes to tackle retail price restrictions, discrimination on the basis of location and geo-blocking.

"Under certain circumstances, these practices may make cross-border shopping or online shopping in general more difficult and ultimately harm consumers by preventing them from benefiting from greater choice and lower prices in e-commerce," reads the press release. "Such behaviour may breach EU competition rules that prohibit anti-competitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union—TFEU)."

Valve, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax are the six games-related companies that have been singled out for scrutiny.

The press release can be read in full this way, however the following excerpt refers directly to videogames within the context of the investigation:

"The Commission is investigating bilateral agreements concluded between Valve Corporation, owner of the Steam game distribution platform, and five PC video game publishers, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax. The investigation concerns geo-blocking practices, where companies prevent consumers from purchasing digital content, in this case PC video games, because of the consumer's location or country of residence.

"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."

It's my understanding that if Valve et al fall foul of the European Commission's rules, players will be legally allowed to buy games from other EU countries' online stores at lesser prices.

TOPICS