EU Objects to Game Companies Geo-blocking Video Games
The European Commission has informed various game companies (platforms and publishers) of its preliminary view that the companies prevented consumers from purchasing video games cross-border from other Member States, in breach of EU competition rules.
According to the Commissioner in charge of competition policy:
In a true Digital Single Market, European consumers should have the right to buy and play video games of their choice regardless of where they live in the EU. Consumers should not be prevented from shopping around between Member States to find the best available deal. Valve and the five PC video game publishers now have the chance to respond to our concerns.
Many of the games at issue require an “activation key” for consumers to authenticate the game and play it.
The Commission’s preliminary view is that the game companies entered into bilateral agreements to prevent consumers from purchasing and using PC video games acquired elsewhere than in their country of residence (so-called “geo-blocking”) against EU antitrust rules.
In particular, the Commission expressed concerns that:
The companies agreed, in breach of EU antitrust rules, to use geo-blocked activation keys to prevent cross-border sales, including in response to unsolicited consumer requests (so-called “passive sales”) of PC video games from several Member States (i.e. Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and in some cases Romania). This may have prevented consumers from buying cheaper games available in other Member States;
Certain companies broke EU antitrust rules by including contractual export restrictions in their agreements with a number of distributors which prevented them from selling the relevant PC video games outside the allocated territories, which could cover one or more Member States. These practices may have prevented consumers from purchasing and playing PC video games sold by these distributors either on physical media, such as DVDs or through downloads.
The Commission’s preliminary view, outlined in its Statements of Objections, is that these business practices partitioned markets according to national borders and restricted passive sales to consumers. These business practices ultimately denied European consumers the benefits of the EU’s Digital Single Market to shop around for the most attractive offer.
If confirmed, this would infringe Article 101 of the Treaty on the Functioning of the European Union, which prohibits anti-competitive agreements.