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Antitrust: EU Commission fines Valve and five publishers of PC video games € 7.8 million for “geo-blocking” practices

TVexperto

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The European Commission has fined Valve, owner of the online PC gaming platform “Steam”, and the five publishers Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax € 7.8 million for breaching EU antitrust rules.

Valve and the publishers restricted cross-border sales of certain PC video games on the basis of the geographical location of users within the European Economic Area (‘EEA'), entering into, the so called “geo-blocking” practices. The fines for the publishers, totalling over €6 million, were reduced due to the companies' cooperation with the Commission. Valve chose not to cooperate with the Commission and was fined over €1.6 million.

Valve was already charged back in 2019 for unfair geo blocking.
 

TheUsual

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Does this nuke regional pricing in Europe then or force Valve and the other companies do not geo block?
 
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cormack12

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Lol, love this line

The fines for the publishers, totalling over €6 million, were reduced due to the companies' cooperation with the Commission. Valve chose not to cooperate with the Commission and was fined over €1.6 million.

Wtf does that even mean.
 

Soodanim

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Lol, love this line

The fines for the publishers, totalling over €6 million, were reduced due to the companies' cooperation with the Commission. Valve chose not to cooperate with the Commission and was fined over €1.6 million.

Wtf does that even mean.
All together the companies' fines totalled at over €6 million, but 5 companies had their charges reduced for cooperating. Valve said "I don't have time for this petty nonsense" so they had no reduction, and have to pay the full €1.6 million.
 
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M1chl

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Lol, love this line

The fines for the publishers, totalling over €6 million, were reduced due to the companies' cooperation with the Commission. Valve chose not to cooperate with the Commission and was fined over €1.6 million.

Wtf does that even mean.
It's wrote retarderly, however it seems like Valve payed 1.6m more than other because they were like "meh don't care".
 

Guilty_AI

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Does this nuke regional pricing in Europe then or force Valve and the other companies do not geo block?
The former will be the consequence of the latter most likely.
In other words, this antitrust commission will probably do more harm than good for the end user if it succeeds
 
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Vae_Victis

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Does this nuke regional pricing in Europe then or force Valve and the other companies do not geo block?
Neither. Valve will pay the €1.6 million fine, won't even notice it (Steam's estimated revenue is in the billions of $ per year) and the world will move on.

Some publishers could take the hint though and avoid doing this in the future. But I doubt Valve will care.
 

Kadve

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1.6 million? Damn, that's harsh. HL3 cancelation confirmed.
Neither. Valve will pay the €1.6 million fine, won't even notice it (Steam's estimated revenue is in the billions of $ per year) and the world will move on.

Some publishers could take the hint though and avoid doing this in the future. But I doubt Valve will care.

Its just a start/warning. Keep ignoring them and you bet its gonna grow rapidity.
 
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Miles708

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Its just a start/warning. Keep ignoring them and you bet its gonna grow rapidity.
Good point, I think it's exactly the point of these fines. After the first time, it can get pretty ugly.

Geo-targeting customers (or using cookies, like airline companies do) to dynamically change prices (or preventing one from buying at the set price) is an horrible thing to do.

Dynamic pricing in general should be prohibited by law in pretty much every case
 
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kuncol02

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Good point, I think it's exactly the point of these fines. After the first time, it can get pretty ugly.

Geo-targeting customers (or using cookies, like airline companies do) to dynamically change prices (or preventing one from buying at the set price) is an horrible thing to do.

Dynamic pricing in general should be prohibited by law in pretty much every case
Games in some countries (Central Europe) are just way cheaper because people would not buy them otherwise (they are expensive as fuck already). As always they will fuck over people in CE.
 

Miles708

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Games in some countries (Central Europe) are just way cheaper because people would not buy them otherwise (they are expensive as fuck already). As always they will fuck over people in CE.
That's also a good point.
 

Fbh

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So basically it's about regional pricing.

Their argument is:
Today's sanctions against the “geo-blocking” practices of Valve and five PC video game publishers serve as a reminder that under EU competition law, companies are prohibited from contractually restricting cross-border sales. Such practices deprive European consumers of the benefits of the EU Digital Single Market and of the opportunity to shop around for the most suitable offer in the EU"

Which sounds all nice and "for the people!", except the end result will just be no more lower regional pricing in the EU and now Pc gamers in, say, Hungary or Poland with average net incomes of less than €1000 will be back to having the same game prices of palaces like France, Germany and Austria with a €2000+ average income.
 

ChuckeRearmed

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Just make NL prices for all the EU region and that's it. Or at least just take the average from the most expensive to the least expensive.
 
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Murr

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"Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal."

If you could get enough people together, this could get quite expensive even for Valve.
 

Sean Mirrsen

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It seems that very few people actually understand the purpose of geo-blocking.

I mean besides the "make more money" thing, as the purpose is in the "how" to make more money. Because publishers, and Valve, would like nothing more than to comply with this and set everyone's prices to the same standard $60 price, across the board - assuming everyone would pay those prices. Which is very, very far from what would actually happen.

The EU law is completely ridiculous in this instance. Geo-blocking exists because in absence of geo-blocking the publishers will be forced to raise prices in all regions to the same level, to prevent abuse and money-laundering through key resale. Valve is completely in the right in "not choosing to cooperate", and thus eating the fine, because maintaining this system is better for consumers and businesses alike.
 

iNvid02

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Dirty bastards should have been fined much more

It seems that very few people actually understand the purpose of geo-blocking.

I mean besides the "make more money" thing, as the purpose is in the "how" to make more money. Because publishers, and Valve, would like nothing more than to comply with this and set everyone's prices to the same standard $60 price, across the board - assuming everyone would pay those prices. Which is very, very far from what would actually happen.

The EU law is completely ridiculous in this instance. Geo-blocking exists because in absence of geo-blocking the publishers will be forced to raise prices in all regions to the same level, to prevent abuse and money-laundering through key resale. Valve is completely in the right in "not choosing to cooperate", and thus eating the fine, because maintaining this system is better for consumers and businesses alike.

No need to worry about how these corporations will make money, that is their problem. If prices went to $60 everywhere, no one would buy games, prices would drop, etc etc
 
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Sean Mirrsen

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No need to worry about how these corporations will make money, that is their problem. If prices went to $60 everywhere, no one would buy games, prices would drop, etc etc
I can buy a loaf of bread for an equivalent of 50 cents. An American can buy the same size loaf of bread for almost three dollars. Should the price of my bread rise just because the Americans are richer, or should American bakers get paid less because our wheat is cheaper?

Games aren't essentials like bread, but the price differential is the same across all goods. A single digital market with the same price for everyone, only works if everyone has the same cost of living and the same wages to work with.
 

Spukc

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HAHAHAHAH GET FUUUUUUUUUUUUUUUUUUUUUUUCKED VALVE

Glad i have been using every fucking dirty trick in the book to dodge high prices with grey keysellers or VPN's
every time i paid these fucks.. Their so called company was located in Luxembourg or Ireland.

Why can't i do the same shit when they obviously do the same damn thing.

NICE :pie_roffles: :pie_roffles: :pie_roffles: :pie_roffles:
 
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ZywyPL

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Those fined companies be like:

 

Miles708

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It seems that very few people actually understand the purpose of geo-blocking.

I mean besides the "make more money" thing, as the purpose is in the "how" to make more money. Because publishers, and Valve, would like nothing more than to comply with this and set everyone's prices to the same standard $60 price, across the board - assuming everyone would pay those prices. Which is very, very far from what would actually happen.

The EU law is completely ridiculous in this instance. Geo-blocking exists because in absence of geo-blocking the publishers will be forced to raise prices in all regions to the same level, to prevent abuse and money-laundering through key resale. Valve is completely in the right in "not choosing to cooperate", and thus eating the fine, because maintaining this system is better for consumers and businesses alike.
The purpose of geo-blocking is to extract as much value as possible from every market. It's made to prevent zones with higher pricing to buy/see/be aware of lower prices elsewhere.

I get what you're saying, but that's kind of a side effect. If they make a profit in lower -income countries, they can make a profit elsewhere too with the same prices. It's all digital after all.

The obvious solution would be to lower prices everywhere. That won't happen, of course, but I feel this is the point we should be discussing.
 
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Sean Mirrsen

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HAHAHAHAH GET FUUUUUUUUUUUUUUUUUUUUUUUCKED VALVE

Glad i have been using every fucking dirty trick in the book to dodge high prices with grey keysellers or VPN's
every time i paid these fucks.. Their so called company was located in Luxembourg or Ireland.

Why can't i do the same shit when they obviously do the same damn thing.

NICE :pie_roffles: :pie_roffles: :pie_roffles: :pie_roffles:
And here we have a prime example of why geo-blocking exists and is necessary in the first place.

Either people too greedy to buy things for the price they have when someone else somewhere is afforded the right to buy them cheaper because they are poor,
or people fucked by EU's single digital market or similar policies and being asked to pay far too much compared to what they can afford.
 
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Spukc

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And here we have a prime example of why geo-blocking exists and is necessary in the first place.

Either people too greedy to buy things for the price they have when someone else somewhere is afforded the right to buy them cheaper because they are poor,
or people fucked by EU's single digital market or similar policies and being asked to pay far too much compared to what they can afford.
not as long as movies can be bought for a tenner.
no fucking way. Gl with that fake ass pricing. We all know the true price for games is around 20 As that is what sales ask.
Then why the hell should i pay 80 euro's day 1?
when i can get it for 30 easy within 3 months..

Because there are too many idiots gaming.. that's why
 

Fbh

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No need to worry about how these corporations will make money, that is their problem. If prices went to $60 everywhere, no one would buy games, prices would drop, etc etc

The lost sales from poorer countries are most probably not going to be high enough to justify lowering the prices in the richer countries.
Publishers aren't going to lower the prices in big active markets like Germany and France to get some extra sales in Poland and Bulgaria.

The end result will be €60+ games across the board, changing nothing for people in richer EU countries and significantly raising prices for those in poorer ones.
 
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Sean Mirrsen

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The purpose of geo-blocking is to extract as much value as possible from every market. It's made to prevent zones with higher pricing to buy/see/be aware of lower prices elsewhere.
More or less, yes. Its purpose is to be able to set prices relative to the standard of living, so that i.e. a game's price can be some fraction of the minimum cost of living, thus ensuring that in no region the product's price is too high to be afforded, or too low to be profitable.

Ideally of course everyone's incomes would be roughly the same, but politics and many other factors prevent that, so it's not a plausible future to look forward to at this point.
 
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Spukc

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The lost sales from poorer countries are most probably not going to be high enough to justify lowering the prices in the richer countries.
Publishers aren't going to lower the prices in big active markets like Germany and France to get some extra sales in Poland and Bulgaria.

The end result will be €60+ games across the board, changing nothing for people in richer EU countries and significantly raising prices for those in poorer ones.
won't happen. 100% will not happen
 

harmny

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The lost sales from poorer countries are most probably not going to be high enough to justify lowering the prices in the richer countries.
Publishers aren't going to lower the prices in big active markets like Germany and France to get some extra sales in Poland and Bulgaria.

The end result will be €60+ games across the board, changing nothing for people in richer EU countries and significantly raising prices for those in poorer ones.

well for jason schreier the solution is easy. poor countries just need to raise the minimum wage to 50k USD a year and problem solved
 

Miles708

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why? that is not a solution at all.
Why isn't it? Regular sales already happen and the majority of people wait for a sale to buy at 1/5 of the launch price. It's just not the official price because that's a can of worms, not because of profitability.


More or less, yes. Its purpose is to be able to set prices relative to the standard of living, so that i.e. a game's price can be some fraction of the minimum cost of living, thus ensuring that in no region the product's price is too high to be afforded, or too low to be profitable.

Ideally of course everyone's incomes would be roughly the same, but politics and many other factors prevent that, so it's not a plausible future to look forward to at this point.

But there's no manufacturing and shipment costs involved here. If you can sell at 30$ in Poland and make a profit you can sell at 30$ and make a profit everywhere. Isn't that the point of digital delivery?
 
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Fbh

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won't happen. 100% will not happen

If they keep getting slap-on-the-wrist fines like the ones here then no, it won't happen.
But if eventually the fines get higher to the point they are forced to take action, it totally will happen.

Steam probably makes more money from the top 5 EU countries than all the others combined.
 

Sean Mirrsen

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But there's no manufacturing and shipment costs involved here. If you can sell at 30$ in Poland and make a peridot, you can sell at 30$ and make a profit everywhere. Isn't that the point of digital delivery?
It is, yes.

The point is exactly that there is no shipment and manufacturing costs involved, so you want to set your price as high as your customers are able and willing to pay. This maximizes your profit (as high as able) and ensures that your product is being bought (as high as willing). The problem is those values, for the amount a customer is able and willing to pay, are different between countries, due to differences in cost of living and average income.

So the ideal system is one that accounts for the differences in cost of living and average income, i.e. regional pricing. However, this system on its own has a massive weakness in that there's nothing stopping everyone from buying things where they're cheapest, thus denying you profit. It wouldn't be so bad if it wasn't a matter of literally five times the difference in price. Therefore, regional locking is implemented, simply ensuring that the system of regional pricing that is designed to be fair to customers, is also used fairly in regards to the provider.
 
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Spukc

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If they keep getting slap-on-the-wrist fines like the ones here then no, it won't happen.
But if eventually the fines get higher to the point they are forced to take action, it totally will happen.

Steam probably makes more money from the top 5 EU countries than all the others combined.
A lot of people simply don't buy games day 1 because prices drop so fast.
It's actually pretty stupid these days,

You pay premium to be a beta tester.
If you have waited you would have paid less for a way better experience
 
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Sean Mirrsen

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A lot of people simply don't buy games day 1 because prices drop so fast.
It's actually pretty stupid these days,

You pay premium to be a beta tester.
If you have waited you would have paid less for a way better experience
I'll do you one better, preorders are still a thing. How does it make sense to pay for a product so far in advance, I have no earthly clue.

FOMO is like a plague that any coronavirus dreams of being.
 
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Bonfires Down

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I don't see it as much of a problem for gamers in poor countries really, they always have the option to pirate. It's more of a problem for the publishers as they won't get much profit in those countries without affordable games.
 

Lanrutcon

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Irrelevant
Poor countries get shafted because people from rich countries pretend to be from poor countries to pay less for games while drinking overly expensive coffee and telling the people from poor countries to just pirate it.

Yeah, Valve is totally the problem here.
 

Holammer

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I see a couple of dumb fucks using this as an opportunity to shit on Valve, but consider the following.



That's the Net average monthly salary for 2019, do you really expect gamers in former Warzaw pact countries to start paying 59,99€ for a new game?
The obvious solution is for Tier2 Euro countries to start buying games with rubles.
 

M1chl

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And here we have a prime example of why geo-blocking exists and is necessary in the first place.

Either people too greedy to buy things for the price they have when someone else somewhere is afforded the right to buy them cheaper because they are poor,
or people fucked by EU's single digital market or similar policies and being asked to pay far too much compared to what they can afford.
Yet Valve is having single payment gate located in Luxembourg, so they can get fucked, when they payed low taxes. MS is doing same thing. So if you buy shit for cheaper prices elsewhere, then meh. People playing games are never as greedy as corporation who are selling them games. Valve losing nothing.
 

Miles708

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It is, yes.

The point is exactly that there is no shipment and manufacturing costs involved, so you want to set your price as high as your customers are able and willing to pay. This maximizes your profit (as high as able) and ensures that your product is being bought (as high as willing). The problem is those values, for the amount a customer is able and willing to pay, are different between countries, due to differences in cost of living and average income.

So the ideal system is one that accounts for the differences in cost of living and average income, i.e. regional pricing. However, this system on its own has a massive weakness in that there's nothing stopping everyone from buying things where they're cheapest, thus denying you profit. It wouldn't be so bad if it wasn't a matter of literally five times the difference in price. Therefore, regional locking is implemented, simply ensuring that the system of regional pricing that is designed to be fair to customers, is also used fairly in regards to the provider.

I get your reasoning, and I know I'm repeating myself, but the point of this system is to make prices higher, not lower. You imply that the "default" price is the one in richer countries and i ask you why is that the case.

The logical next step would be to have prices tailored after your personal income, location and purchase history. That would be good for the customer too, following this line of reasoning.
(I know it's an exaggeration, it's for the sake of the argument)
 

ethomaz

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Lol, love this line

The fines for the publishers, totalling over €6 million, were reduced due to the companies' cooperation with the Commission. Valve chose not to cooperate with the Commission and was fined over €1.6 million.

Wtf does that even mean.
It means the Valve part is being fully paid while the rest of 6b will not be fully paid.

Valve doesn’t care at all... they will pay and continue doing their business... it is already the second time.
 

Fbh

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A lot of people simply don't buy games day 1 because prices drop so fast.
It's actually pretty stupid these days,

You pay premium to be a beta tester.
If you have waited you would have paid less for a way better experience

I mean, I totally agree with you. At this point it's stupid to buy a game day 1 when a couple of months later it will be $30 (specially on PC).
But a lot of people still buy stuff day 1 and we keep hearing about new launches "beating franchise records" and all that. The $60 period is still important and generates a lot of revenue for companies. So I don't think they'll be lowering prices across the EU any time soon.

I'd say the launch price even helps the sale price.
Because a $30 game isn't as attractive as a $60 NOW $30 one
 
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Endless Fluff

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Valve clearly don't give a shit. Too rich to care?
This has nothing to do with Valve not giving a shit. The publishers control prices, not Valve and we have seen what happens to stores who were open to the global market in the past.

You could buy games for next to nothing on Nuuvem 7-8 years ago (when the site was still using a com.br domain), when this caught on publishers started pressuring them and threatened to pull games from their store if they don't start region locking. It was only a few publishers at first who demanded region locks but it got worse and worse and Nuuvem is now pretty much unusable for people outside of Brazil.