- Valve has failed to defend its geo-blocking techniques and reverse the European Commission’s decision to fine the company with €1.6 million.
- The gaming giant was proven guilty of illegally geo-blocking activation keys for games purchased in certain low-economy EU nations. The practice violated the EU’s single market strategy.
- Valve, in response, appealed to the higher court and argued that the copyright law allows them to set prices of their choice in different nations.
- The appeal was rejected by the EU General Court which clarified that the copyright law cannot defend them against creating artificial price differences between national markets.
Valve, the publishing firm behind the popular gaming platform Steam has been denied its appeal against the €1.6 million fine inflicted by the Europen Commission for geo-blocking practices. The company was held accountable with five other widely known game publishers in 2021 by the Europen Commission under an anti-trust investigation. The investigation revealed that these companies were illegally geo-blocking activation keys for games bought in certain EU nations.
Geo-blocking is a technology that restricts access to content based on the user’s location. It was revealed that Valve was in bilateral agreements with other publishers to geo-block the activation keys for PC games purchased in EU countries with lower prices like Romania, Estonia, Latvia, Hungary, Poland, Lithuania, and Czechia. This aimed to prevent users living in other countries from purchasing cheaper keys using VPN services.
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However, this practice goes against the EU’s Digital Single Market rules. The European Commission fined all six companies and while the rest of them were given a reduced fine for cooperation, Valve decided to appeal. The company claimed that the publishers could set varied prices by country under copyright law However the EU General Court upheld that the geo-blocking practice breached EU competition law.
The court clarified that copyright law does not cover “artificial price differences” between national markets and ruled it out as a valid defense.
Copyright is intended only to ensure for the right holders concerned protection of the right to exploit commercially the marketing or the making available of the protected subject matter, by the grant of licences in return for payment of remuneration, However, it does not guarantee them the opportunity to demand the highest possible remuneration or to engage in conduct such as to lead to artificial price differences between the partitioned national markets.”
– EU General Court
Now that the EU General Court, which is the second highest court in the region has rejected Valve’s appeal, it is uncertain whether the company will re-appeal to a higher court or pay the €1.6 million fine. Valve has two months and ten days to appeal again.
Besides Valve, the investigation also targeted major players in the industry, including ZeniMax, Capcom, Bandai Namco, Focus Home Interactive, and Koch Media. The European Commission, however, has demonstrated its zero-tolerance against any actions that violate the EU’s single market strategy.
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