Geoblocking of videogames and competition law: General Court confirms that Steam and videogame publishers breached Article 101 TFEU

· copyright,antitrust,Article 101 TFEU,Steam,geoblocking

For those interested in the interplay between IP rights's territorial character and free competition, the judgment issued by the General Court (GC) in Valve Corporation, T-172/21 earlier this week is a must-read.

Not only did the Court tackle the vexed issue of the applicability of Article 101 TFEU in the copyright context, but also touched upon the relevance and treatment, under the latter, of technological protection measures (TPMs) and the doctrine of exhaustion.

Here's a quick summary of the ruling, which focuses on what I think are the most relevant aspects for copyright aficionados.

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Background

Valve is the operator of well-known online gaming platform Steam.

The games available there are developed, first, by gaming publishers, who then conclude distribution agreements with Steam. In order to develop the games, Steam licenses its own technology to the publishers (‘Steamworks services’), who subsequently upload them on the platform while granting Steam non-exclusive licences.

The games are available for ‘sale’ directly on Steam or through third-party distributors. In the latter case, an activation key is provided by Steam as part of its Steamworks services. However, the interesting bit insofar these services are concerned is another feature, that is: a territory control function (geoblocking), which allows the user (a) only to activate the game in a certain territory or (b) only to activate and play the game in a certain territory.

This geoblocking functionality attracted the attention of the European Commission which, in 2017, launched an investigation. In 2021, the Commission decided that Valve, together with 5 publishers, had breached Article 101 TFEU and Article 53 of the EEA Agreement through anti-competitive agreements or concerted practices aimed at restricting cross-border sales of Steam videogames in the form of passive sales.