With decision of 09.27.2023 (C T-172/21), the Court of the European Union stated that the activation of geoblocking in order to prevent the access to videogames available on the Steam platform, represents a violation of the European law on competition.
How does geoblocking work?
Geo-blocking is a practice, generally realized by localizing the user’s IP, which allows or denies the access to websites or digital content depending on the geographical position of the user. The European institutions looked at this practice with particular attention because of its potential discriminatory feature: with geo-blocking, as a matter of fact, the access to digital content or the online purchase of goods or services is hindered only to users of specific territories, while being available for users somewhere else.
The Steam platform case
After having received many reports on the use of geo-blocking by the videogame platform Steam, in 2021 the European Commission verified that the provider of the platform and other 5 videogame publishers violated the competition law of the European Union. In particular, the Commission charged the provider and publishers of having participated to a set of anti-competition deals with the aim to limit cross-border sales of some videogames. This limitation was introduced through the activation of geoblocking features between 2010 and 2015, in particular in Baltic States and in some countries of the central and oriental Europe.
Following the Commission decision, the provider of the platform proposed an appeal to the Court of the European Union to obtain its annulment, claiming that the geo-blocking employed was a measure to protect the publishers’ copyright.
The decision of the Court of the EU
The Court rejected the appeal of the provider, considering sufficiently demonstrated the existence of an agreed practice with each of the five publishers and aimed at limiting the parallel imports through geoblocking of the keys that enable to active specific videogames on the platform.
In this way, they wanted to prevent that the videogames, distributed in many countries at low prices, would have been purchased by distributors or users located in other countries where prices would have been much higher.
Therefore, the geoblocking under issue did not pursue a goal of protecting the copyright of the videogame’s publishers, but it was used just to exclude parallel imports of such videogames and safeguard the high price of the amount of royalties collected by publishers and the platform provider.
By rejecting the appellant’s many different defensive arguments, the Court clarified also the relation between the right to competition of the European Union and copyright. On this regard, the Court recalled that copyright aims only at guaranteeing to right owners the power to commercially exploit their own works, even by granting licenses in return for the payment of a fee.
Nevertheless, “it does not guarantee them the possibility to claim the highest fee possible, nor to adopt a conduct such as to determine artificial price differences between compartmentalized national markets. In fact, such compartmentalization and the resulting artificial price difference are not compatible with the achievement of the internal market”.
Ilaria Feriti