Valve Loses EU Geo-blocking Case

Valve Loses EU Geo-blocking Case

Valve Corporation, the American video game developer and digital distribution company, has fallen foul of the European Union (EU) competition law. The EU General Court ruled that Valve’s use of geo-blocking for activation keys is unlawful. Geo-blocking is a practice that restricts the accessibility of goods or products in specific countries or territories. In Valve’s case, this was used to prevent customers from buying products from markets with lower prices.

The case centered around allegations that Valve and five publishers agreed to use geo-blocking to prevent activation keys sold in certain countries from working in others. This was found to violate the EU’s Digital Single Market rules, which promote an open market across the EU. The Digital Single Market is a policy belonging to the European Single Market that covers digital marketing, E-commerce, and telecommunication.

The Battle of Valve against the European Union

While Valve’s co-accused, five game publishers, cooperated with the investigation and received a reduced fine, Valve chose to fight the charges. The company was subjected to the full €1.6 million fine for its infringement. Valve has argued that the region locking was done at the request of publishers and that it should not be held liable for this decision.

Despite Valve’s arguments, the court upheld the original decision, asserting that the companies had unlawfully restricted cross-border sales of games. The court stated that copyright law does not guarantee publishers the opportunity to demand the highest possible remuneration or to engage in conduct that leads to artificial price differences between partitioned national markets.

Reactions and Future Prospects

Valve still has a chance to appeal this decision, but time is running out. The company has two months and ten days from the date of the ruling to lodge an appeal. Valve’s spokesperson has revealed that the company plans to appeal the decision, stating that region locks were only applied to 3 percent of games using Steam.

While Valve fights its case, the EU’s stance on geo-blocking is clear-cut. The European Commission’s head of competition policy emphasized that companies are prohibited from contractually restricting cross-border sales. Such practices deprive European consumers of the benefits of the EU Digital Single Market and the opportunity to shop around for the most suitable offer in the EU.