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Valve respond confusingly to European Commission region-locking complaint

Earlier today, the European Commission released a statement claiming Valve and five other publishers may have worked together to breach EU international competition rules. The companies are accused of blocking the activation of Steam keys purchased from other nations, even if the purchase and activation locations are both EU member states.

The companies named include Bandai Namco, Capcom, Focus Home, Koch Media (including Deep Silver) and ZeniMax (Bethesda). So far, only Valve have responded (statement in full here on SteamDB), and their argument seems to boil down to ‘Yes, we did that, no, that law doesn’t apply to us and it wasn’t a big deal anyway’.

It’s worth noting that the Statement Of Objections is just the European Commission’s preliminary findings, and there have been no legal penalties yet. If found in breach of anti-trust laws, the commission is capable of forcing the guilty parties to pay a fine of up to ten percent of their yearly turnover. Given that Valve is one of the parties named, that could be a very large number indeed, so I’m not surprised to see them trying to wriggle out of the charges immediately. It’s just unusual how they’ve chosen to do it. Valve’s statement takes a while to get to the point, but eventually they say:

“The region locks only applied to a small number of game titles. Approximately just 3% of all games using Steam (and none of Valve’s own games) at the time were subject to the contested region locks in the EEA. Valve believes that the EC’s extension of liability to a platform provider in these circumstances is not supported by applicable law.”

I’m not entirely sure what they think they’re arguing here. 3% of all games on Steam is not a small number, considering the sheer number of games sold on the store. That so many were in violation of EU law is rather significant, or so I think. I admit that I’m not a lawyer, but saying that only three in every hundred things you did may have been a crime is not the best argument in your favour. Following up the admission with the belief that this doesn’t apply anyway is even more bizarre.

Still, Valve say they acknowledge and feel they addressed the problem back in 2015, when they “turned off region locks within the EEA starting in 2015, unless those region locks were necessary for local legal requirements (such as German content laws) or geographic limits on where the Steam partner is licensed to distribute a game”. So, they lifted region restrictions except in the cases where they didn’t. While I can see the argument of restricting things from activation in Germany due to local laws, the argument on region licensing is somewhat shakier.

Valve end by further defending region locking, claiming that “elimination of region locks will also mean that publishers will likely raise prices in less affluent regions to avoid price arbitrage”. Again, I’m no lawyer, but this does not strike me as the greatest argument when you’re accused of breaking EU laws. It feels more like playing to a crowd of publisher shareholders and possibly nervous retailers (again, tied to the publishers) who might be spooked by the possibility of regulation and adherence to the law raising prices. I am eager to hear what the European Commission have to say in response. As for my take, I think RPS’s No Oceans stance sums it up well enough.

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Dominic Tarason

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