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Nintendo, Game-Making Rivals Probed Over Contracts in Europe

Giles Turner

(Bloomberg) -- The European Commission accused Valve Inc., the owner of Steam, and five other video-game publishers of breaking competition rules, while the U.K. began a probe into the automatic renewal of online gaming deals from Nintendo Co. and Sony Corp.’s PlayStation.

Contracts that penalize some customers because of where they live are a focus of several EU antitrust probes that have already fined Nike Inc. and Guess? Inc. for unfairly curbing sales outside of one country. Britain’s Competition and Markets Authority is looking at the annual rollover of contracts, and barriers consumers face to canceling them. The investigations form part of a larger push to knock down barriers to online sales.

The EU’s preliminary view is that Valve, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax, prevent consumers from purchasing video-games in one country to play in another, which would be a breach of competition rules, the regulator said Friday.

“In a true digital single market, European consumers should have the right to buy and play video-games of their choice regardless of where they live in the EU,” Competition Commissioner Margrethe Vestager said. “Consumers should not be prevented from shopping around between member states to find the best available deal.”

The announcement arrived an hour after the U.K. Competition and Markets Authority started a consumer-law investigation of Nintendo, Sony’s PlayStation, and Microsoft’s Xbox, into their terms for the auto-renewal of subscription products.

“Our investigation will look into whether the biggest online gaming companies are being fair with their customers when they automatically renew their contracts, and whether people can easily cancel or get a refund,” Andrea Coscelli, head of the CMA, said. “Should we find that the firms aren’t treating people fairly under consumer protection law, we are fully prepared to take action.”

The EU said Valve and the other five video-game publishers entered into bilateral agreements to prevent consumers from purchasing and using software acquired somewhere other than their country of residence -- so-called “geo-blocking” -- against EU antitrust rules.

Valve owns the world’s largest game-distribution platform, Steam.

The EU began its investigation in 2017, targeting retailers that maybe setting unfair terms for who buys what and where. On the gaming platforms, users need to typically type in an activation key into software after they’ve bought it. However, this key effectively prevents them from buying the game at a cheaper price in another country in the EU.

--With assistance from Gaspard Sebag and Aoife White.

To contact the reporter on this story: Giles Turner in London at gturner35@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Nate Lanxon, Christopher Elser

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