This article was updated shortly after publication to add a comment from Valve, which rejected the Commission's conclusions and announced its intention to appeal. Click here to jump to Valve's statement.

The Commission fined Valve, Namco Bandai, Capcom, Focus Home Interactive, Koch Media and ZeniMax a total of €7.8 million for violating antitrust laws, after Valve failed to cooperate with the Commission ( Valve was fined €1.6 million for its failure to cooperate with the Commission (an allegation the company denies), while the fines for the other five companies were slightly reduced for their cooperation (not that this helped Focus Home Interactive, which received a whopping €2.9 million of the total fines).

This decision was based on the fact that the company had been "fined" €2.9 million.

The ruling is the result of one of three investigations that began in 2017, and today the Commission writes: valves and publishers restrict cross-border sales of certain PC video games based on the geographic location of users within the European Economic Area ("EEA"), engaged in so-called "geo-blocking". Thus, both companies "divided the EEA market in violation of EU antitrust rules."

The EU's Digital Single Market Regulation has the goal of "eliminating unwarranted geo-blocking."

The EU's Digital Single Market Regulation has the goal of "eliminating unjustified geo-blocking.

In other words, there can be no restrictions on cross-border sales of digital products within the EU. The key element here is that Steam once provided publishers with territory control capabilities, allowing them to set geographical limits on activation. The European Commission argues that this combination of Steam's activation key and territory control functionality amounts to a geographic block on the sale of PC games within the EU. Valve removed most of these features from Steam in 2015.

The Commission's decision details the illegal practices found over a specific time period and region: between September 2010 and October 2015, "Valve and each of the five PC game publishers, Czech Republic, Poland, Hungary, Romania, bilateral agreements and/or concerted practices implemented by geo-blocking Steam activation keys so that certain PC game software from these publishers cannot be activated outside of Slovakia, Estonia, Latvia, and Lithuania."

The report found further examples of this type of agreement between Namco Bandai, Focus, Koch, and ZeniMax and other publishers. These violations concerned the same European countries and took place between March 2007 and November 2018.

"The geo-blocking acts concerned approximately 100 PC video games of different genres, including sports, simulation and action games," the Commission wrote. These acts prevented consumers from activating and playing PC video games sold by the publisher's distributors, either on physical media such as DVDs or by download."

The Commission's decision is accompanied by this illustration.

The Commission's decision then details the fines to be imposed on each company. Because the five publishers in question were cooperative, "the Commission allowed the fines to be reduced according to the extent of this cooperation. Capcom was clearly the most cooperative and received a 15% reduction.

The fact that Focus Home Interactive was fined a whopping €2.9 million, even if it was deserved, is an eye-opener, even though many other companies are so much larger.

Valve has disappeared from the table of cooperators. Valve has chosen not to cooperate with the Commission. The Commission therefore adopted a prohibition decision against Valve under its normal antitrust procedures and imposed a total fine of €1,624,000. "

EU Commission Vice-President in charge of competition policy Margrethe Vestager said of the ruling.

"More than 50% of Europeans play video games. The European video game industry is thriving and is now worth more than €17 billion. Today's sanctions against Valve and five PC game publishers for their "geo-blocking" practices are a reminder that under EU competition law, companies are prohibited from contractually restricting cross-border sales. Such conduct deprives European consumers of the benefits of the EU Digital Single Market and the opportunity to search for the best products within the EU"

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Valve provided PC Gamer with the following statement, expressing its intention to appeal the decision: "During the seven-year investigation, Valve has cooperated extensively with the European Commission ("EC"), providing evidence and information upon request. However, Valve has failed to admit that it violated the law, as required by the EC, and Valve does not consent to the EC's findings or to the fine against it.

"The EC's charges do not relate to the sale of PC games on Valve's PC gaming service, Steam... The EC found that Valve provided Steam activation keys and, at the publisher's request, locked those keys to specific regions within the EEA ("region locking"). region locking"), which it claims enables geo-blocking. Such keys allow customers to activate and play games on Steam when users purchase them from third-party resellers; Valve provides Steam activation keys free of charge to third-party resellers (such as retailers and other online stores, etc.) that sell the game will not receive any portion of the purchase price.

"Region locking only applied to a small percentage of game titles. Only about 3% of all games using Steam at the time were subject to the region locking challenged in the EEA (Valve's own games were not.) For Valve to extend the EC's liability to the platform provider in such a situation , not supported by applicable law. Nevertheless, due to EC concerns, Valve actually eliminated region locking within the EEA beginning in 2015. However, this does not apply if region locking is necessary due to local legal requirements (e.g. German content law) or geographical restrictions on where Steam partners are allowed to distribute their games. The elimination of region locks may also allow publishers to raise prices in less affluent regions to avoid price arbitrage. There would be no cost to send an activation key from one country to another, and the user would only need the activation key to activate and play the PC game.