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Valve fails to get out of paying its EU geo-blocking fine
(www.engadget.com)
Good. Fuck all DRM
I mean, they just paid a 1.6 million € fine.
Entertain me this hypothetical:
You're a pizza delivery person, and you know there are some routes you can take to save you more than 20 min for some deliveries, but you're going the wrong way in one way roads.
One day you get caught, and you get fined 20 cents. You make an extra 5 bucks per delivery. Will you stop going the wrong way to save you 20 min each time you have to do those deliveries?
Well, this is the fundamental problem with fines. They are stupidly, gargantually disproportionate to what they're trying to achieve.
Which means that companies make more money paying the fine whenever they get caught, than just not doing whatever illegal thing they're doing.
Valve won't break the law for other publisher's profits. Steam is just a store front, they were geo blocking on behalf of other publishers.
Valve also doesn't take a cut from steam key sales not bought directly through their storefront, so the geoblocking keys isn't something that will impact them. More likely, this will result in citizens of poorer EU countries getting screwed over by having to pay higher prices for games, since they can't stop EU citizens from taking advantage of buying the game from the poorest EU country.
Yes, this will just mean that game publishers will set one price for the whole EU which will be based on the income in the richest countries. They can still geoblock countries outside of the EU, just not within it.
Progress isn’t linear and it sure as hell doesn’t come when we say the problem isn’t worth even addressing because our current tools aren’t big enough for its scale.
Yeah, fines need to be calculated on an exponential scale based on the income and value of the target. The richer they are, the more painful the penalty. One wrong move and the billionaire is reduced to a meth addicted hobo living under a bridge.
Good, a well deserved fine for shitty price fixing actions.
Localised pricing is good though? Is it really fair ask someone in India to pay the same price as an American? If you can't geo block keys, you can't stop people taking advantage by using a VPN to buy games from whatever country got the lowest price. The result will just be publishers keeping the high price for every country, screwing poorer regions over.
Also, what they did wouldn't really qualify as price fixing.
Did you read the article? This isn’t comparable to your India vs America example, it’s specific to prices only within the EU where the EU has digital market rules that specifically prohibit this.
What Valve did does sound like price-fixing too according to your linked definition of “an agreement among competitors to [fix] price levels”:
“Valve and five publishers (Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax) agreed to use geo-blocking so that activation keys sold in some countries … would not work in other member states. That would prevent someone … buying a cheaper key … where prices are lower.”
Yes I did read it. I was pointing out that all this will do is screw over citizens of poorer EU countries. India vs USA was simply to make it obvious why the concept of geo blocking makes sense. Germans will on average have stronger buying power than someone in Latvia.
Steam is a storefront, not a competitor to game publisher. It's effectively no different than Lidl agreeing to run a regional rebate program for Samsung TVs in Latvia for whatever reason.
The geo blocking enabled cheaper prices for certain countries, not higher. The only people who would have an issue with it is people from richer countries that for some reason are jealous of lower prices in some countries.
I'll admit I may not understand economies well, but the inverse is that these publishers are enabled to charge higher prices in higher-income countries. The cost of creating their goods is constant, so if Valve isn't selling at a loss to poorer regions then they are simply extracting additional profit from higher-income regions on the assumption that those customers can afford it.
I wonder how this kind of scenario plays out in other industries. Regardless, it seems like the EU has a goal of reducing gaps in buying power between their members, and their unified digital market is a step in that direction.
I think applying traditional economics to this situation is wrong. Games are digital goods so beyond translation and maybe some regional censorship, there isn't much additional cost to sell at a discounted price in lower income countries. If anything, being able to sell the same product in lower countries would lower the cost in higher income countries.
if Valve isn't selling at a loss to poorer regions then they are simply extracting additional profit from higher-income regions on the assumption that those customers can afford it.
Valve can't sell for a loss the same way ebay can't. Valve simply takes a percentage of the price everytime a game is bought, publishers are in complete control of the price they want to sell. Often, publishers will let Steam automatically set regional pricing based e.g. the American price though.
The way these publishers operate, they will simply set the price at the highest possible value to extract as much as money ad they can from those willing to spend 60+$. Those unwilling or incapable of spending that amount of money, will just buy the game later on a sale. Price skimming has only become more and more prevalent in PC gaming with steam being the "innovator" of frequent sales.
Welcome to capitalism achievement unlocked.
Congratulations, you have finally find out how corporations fuck with customers to juice them as much as legally possible of money for their executives and shareholders.
You talk like the whole of the EU is all in the same financial boat.
Having lower prices for poorer regions isn't price fixing. The real issue is that it's hard as fuck to find a way to have localized pricing when every bordering country, richer or poorer, uses the same currency.
Now let's see Australian consumers get fair pricing from Valve. We get royally screwed.
this post was submitted on 28 Sep 2023
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