It was rumored that an investigation was being carried out into Valve (and others) geo-blocking practices, and it has now been confirmed in an official report from the EU Commission.
Valve and several game publishers – such as ZeniMax and Bandai Namco – will be fined for using geo-blocking to restrict purchases of video games to/within certain EU member countries.
— The Verge (@verge) January 20, 2021
What is geo-blocking? In practice, geo-blocking means restricting access to certain games on Steam within a geographical area. The combination of territory-locking and Steam activation keys means Valve and the publishers could restrict people from buying a Steam key from outside their country.
The Commission report mentions several Eastern European countries as an example, although in theory geo-blocking can be applied in any EU country. Geo-blocking affects people in these countries more because of the price discrepancy – they can get a better deal by buying a discounted game from another country, whereas the price for a game in Latvia, for example, is much more expensive.
Geo-blocking essentially limits the effectiveness of the EU Single Digital Market, which is a law put in place by the EU to protect consumer rights and allow people to shop around for the best price. This is one of the founding principles of the EU market and it’s clear the Commission will continue to protect its consumers.
The publishers fined were: Bandai Namco, Capcom, Focus Home, Koch Media, and ZeniMax. Some publishers had their fines reduced after cooperating with the commission to prevent geo-blocking practices in the future.
Valve, however, refused to cooperate and was fined just under 2 million euros for its complacency and encouragement of geo-blocking practices.
Geo-blocking apparently had an impact on over 100 Steam games, from a variety of genres. This makes sense considering the different types of Publishers involved with the practice.
Access was denied to the games if the player bought it on a disc or via a digital download, making it impossible for them to activate the game within their home country.
Overall, it’s no surprise Valve refused to cooperate. It’s protecting its publishers and the company’s right to determine where games can be bought and sold. However, this won’t work under the European system, which is designed to be fair for everyone within the Union.
You can’t force people to spend more on a game when it is available for digital download at half the cost across the border.