this post was submitted on 28 Sep 2023
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Valve loses a court case in the EU and has to pay 1.6 million euros in fines for geoblocking (mezha.media)
submitted 1 year ago by BuddyTheBeefalo@lemmy.ml to c/games@lemmy.world
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[–] tal@kbin.social 32 points 1 year ago* (last edited 1 year ago) (3 children)

Valve was fined €1.6 million ($1.7 million) for obstructing the sale of certain PC video games outside Europe. However, the company pleaded not guilty.

Wait, outside Europe?

Some countries make it illegal to buy certain video games. If Valve can't geoblock sale of them outside Europe, how are they supposed to conform with both sets of laws?

I remember that the EU didn't want country-specific pricing inside the EU, and had some case over that. That I get, because I can see the EU having an interest in not wanting it creating problems for mobility around the EU. But I hadn't heard about the EU going after vendors for not selling things outside Europe.

[–] Phanatik@kbin.social 38 points 1 year ago (1 children)

Okay this article is shittily worded and the Bloomberg article it links to is paywalled so I found this which goes into much greater detail.

TLDR: Valve and five other publisher's were blocking activation of keys sold to people/distributors from distributors/vendors who purchased them from cheaper regions.

[–] money_loo@lemmy.world 11 points 1 year ago (1 children)

Ah yes, that thing my brother likes to do where he VPNs into another country and then buys them at the greatly reduced local prices.

Guess they were attempting to crack down on purchase frauds and legitimate buyers got burned too?

[–] Phanatik@kbin.social 9 points 1 year ago (1 children)

It was punishing the consumer rather than the distributors abusing the regional pricing.

[–] phillaholic@lemm.ee 18 points 1 year ago

Yes, but it was the part they have control over. The alternative is not having regional pricing allowing lower income countries to buy games at all.

[–] Sparx@feddit.de 12 points 1 year ago* (last edited 1 year ago)

The article is shit. In the official response they talk about the following countries, none of them is outside Europe: Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania

https://ec.europa.eu/commission/presscorner/detail/en/IP_21_170

[–] serratur@lemmy.wtf 5 points 1 year ago (1 children)

I think they meant sale of region specific games not being available to EU citizen living outside Europe

[–] tal@kbin.social 5 points 1 year ago* (last edited 1 year ago) (1 children)

But retail law attaches to a location, not to citizenship. Why would the EU be mandating sale of things in other regions? I mean, it's not like the US says "if an American citizen is living in the EU, then vendors operating in the EU must follow American retail law when selling to him".

EDIT: Okay, I went looking for another article.

https://www.gearrice.com/update/steam-cannot-block-the-activation-of-a-game-depending-on-the-country-of-purchase-europe-confirms/

Steam specifies in its terms of use that it is prohibited to use a VPN or equivalent to change your location on the platform. Except that it takes the case of the activation of a game given to you by someone and sent to your account. Following Europe’s decision, this should technically change and it would be possible to change region in Steam directly to buy a game then activate it in France. Valve has not made a comment at this time.

Hmm. Okay, if that is an accurate summary -- and I am not sure that it is -- that seems like the EU is saying "you must be able to use a VPN to buy something anywhere in the world, then activate it in Europe". Yeah, I can definitely see Valve objecting to that, because that'd kill their ability to have one price in the (wealthy) EU and one in (poor) Eritrea, say. Someone in France would just VPN to Eritrea, buy at Eritrean prices, and then use it in France. The ability to have region-specific pricing is significant for digital goods, where almost all the costs are the fixed development costs.

thinks

If that is an accurate representation of the situation, that seems like it'd be pretty problematic for not just Valve, but also other digital vendors, since it'd basically force EU prices to be the same as the lowest prices that they could sell a digital product at in the world. I don't know how one would deal with that. I guess that they could make an EU-based company ("Valve Germany") or something that sells in the EU, and have a separate company that does international sales and does not sell in the EU.

I mean, otherwise a vendor is either going to not be able to offer something in Eritrea (using it as a stand-in for random poor countries), is going to have to sell it at a price that is going to be completely unaffordable to Eritreans, or is going to have to take a huge hit on pricing in the EU.

I'm a little suspicious that this isn't a complete summary of the situation, though; that seems like it'd create too many issues.

EDIT2: Though looking at my linked-to article, it seems to be that the author is saying that that's exactly what the situation is.

[–] JasSmith@kbin.social 8 points 1 year ago (1 children)

That's not quite the situation here. The EU is preventing price discrimination within the EU. Price discrimination is generally disallowed in the EU single market. This is intended to foster greater synergies and efficiencies of scale, as opposed to current international trade agreements which are slow to form, and even slower to update as necessary. Part of the single market is the requirement that products and services not discriminate solely on the basis of nationality. Companies are permitted to charge differing amounts based on location and channel, but every consumer in the EU must have the right to purchase that product or service at that location or channel for the same price.

The single market has been one of the major economic drivers for success in the EU, ensuring poor countries have been able to quickly catch up with developed nations. Poor nations can charge developed nation prices for their products and services without risk of systemic barriers or anti-competitive arbitrage. Software is no different. Harmonised access maximises competition, promotes growth, and keeps aggregate prices low. The cost is that prices will rise in some EU nations, as they fall in others.

[–] tal@kbin.social 7 points 1 year ago* (last edited 1 year ago) (1 children)

The EU is preventing price discrimination within the EU.

They do have that requirement as part of the Digital Markets Act, but I don't believe that that's what the case here is addressing. That is not what the article OP posted or the article I linked to is saying: they are specifically saying that what is at issue is sales outside Europe.

EDIT: I am thinking that maybe the article is just in error. I mean, just from an economic standpoint, the EU doing this would create a major mess for international companies.

EDIT2: Okay, here's an archive.ph link of the original Bloomberg article:

https://archive.ph/JuM0z#selection-4849.212-4863.277

In the contested arrangement with Valve, users were left unable to access some games that were available in other EU nations.

Yeah, so it's just that these "mezha.media" guys mis-summarized the Bloomberg article.

[–] JasSmith@kbin.social 2 points 1 year ago

Your edits are correct. The mezha.media site most likely misinterpreted the presser.

This is the 2021 ruling if you'd like more info. Valve just lost the appeal.

[–] darq@kbin.social 19 points 1 year ago (2 children)

Is this going to impact their ability to offer region-specific pricing?

[–] sadreality@kbin.social 10 points 1 year ago (1 children)

Ya I am not following what was the actual issue here.

[–] dustyData@lemmy.world 20 points 1 year ago (2 children)

Suppose you are an European citizen and you live in Egypt. Valve used to block you from purchasing a game available in Europe. Despite the fact that you are European and your store settings were set to Europe. That's geogblocking. Now valve is not allowed to do that according to EU law. They still deny access and discriminate based on geography with plenty of excuses. But they can't use the IP geolocation anymore. Mind you, they still claimed not guilty despite the fact they were caught red handed and dragged the whole thing up to appeals. Despite the fact they still pretty much still do it for certain games from time to time.

[–] JasSmith@kbin.social 9 points 1 year ago (1 children)

Suppose you are an European citizen and you live in Egypt.

I don't think that is correct. The investigation began in 2015 by Margrethe Vestager. The focus is within the EU. Valve cannot prevent geo-blocking between EU countries. They're free to use IP geo-blocking, but users within the EU must be given the ability to switch to different EU stores. I.e. a Dane must be allowed to log into the Hungary store and purchase games at the local price. This has implications for keys as well, as a Dane must not be prevented from redeeming a Hungarian key, for example.

[–] dustyData@lemmy.world 3 points 1 year ago

You're correct, I expanded with real details and a source in another comment.

[–] sadreality@kbin.social 1 points 1 year ago (2 children)

I don't get their angle here tho... Wouldn't EG copy be cheaper?

[–] dustyData@lemmy.world 8 points 1 year ago* (last edited 1 year ago)

I used Egypt just as an example, the countries actually involved are Latvia and other EU countries. This is a really old case, it used to be the case that the steam store wouldn't even open if your were not from the US. There's a complex web of financial trade agreements and red tape behind making a global digital store with regional pricing available. There's also a lot of shenanigans that go on to avoid abuse of regional pricing. Steam limits changing your store region to once every 6 months, for example. Which makes it impossible to exploit the regional pricing model. This case is precisely because Steam and the 5 stooges (Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax) didn't want to let EU citizens from one country buy a cheaper version of the same game in another EU country. I think the most egregious thing is that Valve claimed not guilty, not by saying they didn't do it, but that they did it and they were in their right to do so. The EU said, it's not abusing the store, EU citizens are in their right to use whatever store from any other EU country under the single digital market law.

Unlike the EU, the rest of the world is still geoblocked, and discriminated by Steam. For instance, I can't buy Elden Ring, I can't even see their store webpage at all. Regional pricing is a good thing to make games affordable for different markets with different purchase and income levels (fuck Epic store), but it should be based on currency and payment method, not geographical location. This along with Nintendo's regional blocking and the bullshit that Hollywood does wolrdwide are just anti-consumer manipulation.

Source.

[–] chaogomu@kbin.social 1 points 1 year ago

Cheaper, or banned entirely by the Egyptian government. Valve is sort of in a tough spot here. The EU will fine them, but so will every authoritarian regime that bans anyone in the country from downloading banned items.

[–] JasSmith@kbin.social 1 points 1 year ago (1 children)

Within the EU, kind of. This doesn't prevent Steam from offering different prices by region, but they must allow users to log into different regions to make purchases at the localised prices. In practise, like all other products and services in the EU, prices will harmonise. In other words, they'll rise in some countries, and drop in others. There are a litany of benefits for the EU single market, so this law will not change. Valve must adapt.

[–] Marsupial@quokk.au 2 points 1 year ago

Rising costs for poorer member states sure sounds like a great benefit of this short sighted system.

[–] Shizu@lemmy.world 17 points 1 year ago (1 children)

1.6 million € for valve is like making me pay 0.01€ for something