Summary of Commission Decision

of 20 January 2021

relating to a proceeding under Article 101 of the Treaty on the functioning of the European Union and Article 53 of the EEA Agreement

(Cases AT.40413 – Focus Home, AT.40414 – Koch Media, AT.40420 – ZeniMax, AT.40422 – Bandai Namco and AT.40424 – Capcom

(Video Games Cases))

(notified under documents C(2021) 57 final, C(2021) 63 final, C(2021) 72 final, C(2021) 74 final, C(2021) 75 final and C(2021) 78 final)

(Only the English text is authentic)

(Text with EEA relevance)

(2022/C 320/19)

On 20 January 2021, the Commission adopted six decisions relating to proceedings under Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the Agreement on the European Economic Area in the five Cases AT.40413 – Focus Home, AT.40414 – Koch Media, AT.40420 – ZeniMax, AT.40422 – Bandai Namco and AT.40424 – Capcom. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003 (1) , the Commission herewith publishes the names of the parties and the main content of the decisions, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets.

1. INTRODUCTION

(1) The Decisions relate to restrictions of cross-border sales of certain personal computer (‘PC’) video games in the European Economic Area (‘EEA’). They are addressed to the following legal entities: — Focus Home Interactive S.A. (‘Focus Home’), in Case AT.40413 – Focus Home; — Koch Media GmbH (Austria), Koch Media GmbH (Germany) and Koch Media Ltd (the undertaking comprising those three entities being referred to as ‘Koch Media’), in Case AT.40414 – Koch Media; — ZeniMax Media Inc., ZeniMax Europe Ltd. and Bethesda Softworks LLC (the undertaking comprising those three entities being referred to as ‘ZeniMax’), in Case AT.40420 – ZeniMax; — Bandai Namco Holdings Inc. and Bandai Namco Entertainment Europe S.A.S. (the undertaking comprising those two entities being referred to as ‘Bandai Namco’), in Case AT.40422 – Bandai Namco; — Capcom Co., Ltd, Capcom USA, Inc. and CE Europe Ltd. (the undertaking comprising those three entities being referred to as ‘Capcom’), in Case AT.40424 – Capcom, and — Valve Corporation (‘Valve’), in Cases AT.40413 – Focus Home, AT.40414 – Koch Media, AT.40420 – ZeniMax, AT.40422 – Bandai Namco and AT.40424 – Capcom.

(2) Bandai Namco, Focus Home, Capcom, Koch Media and ZeniMax are together referred to as ‘the Publishers’, and together with Valve as the ‘Parties’. Valve operates an online PC gaming platform called ‘Steam’, which is available worldwide.

(3) The Decisions concern six separate single and continuous infringements of Article 101 TFEU and Article 53 of the EEA Agreement consisting of: (i) bilateral agreements and/or concerted practices between Valve and each of the Publishers aimed at restricting cross-border sales of certain PC video games outside of designated Member States and Contracting Parties to the EEA Agreement based on the geographical location of the user (‘geo-blocking’) as well as (ii) cross-border sale restrictions contained in licensing and distribution agreements between each of Bandai Namco, Focus Home, Koch Media and ZeniMax and their respective distributors in the EEA (other than Valve).

2. CASE DESCRIPTION

2.1. Procedure

(4) On 2 February 2017, the Commission initiated proceedings within the meaning of Article 2(1) of Regulation (EC) No 773/2004 ( 2 ) against the Parties and all legal entities directly or indirectly controlled by them in the above cases.

(5) On 5 April 2019, the Commission adopted five Statements of Objections, addressed to Valve (in all five cases) and to each of the Publishers (one in each case). The Statements of Objections set out the Commission’s preliminary competition concerns in relation to certain practices between Valve and each of the five Publishers having the object of preventing or restricting the sale of PC video games across national borders within the EEA contrary to Article 101 TFEU and Article 53 of the EEA Agreement.

(6) Subsequently, the Publishers indicated their interest to cooperate with the Commission and, later on, they submitted formal offers to cooperate in view of the adoption of a decision pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003.

(7) Valve chose not to cooperate with the Commission. On 17 July 2019, it submitted its five written responses to the five Statements of Objections, each of which included a request to be heard orally. The oral hearing of Valve took place on 9 October 2019.

(8) The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on 11 January 2021.

(9) On 18 January 2021, the Hearing Officer issued his final report.

(10) The Commission adopted the Decisions on 20 January 2021.

2.2. Summary of the infringements

(11) The Decisions find that Valve and each of the Publishers engaged in geo-blocking practices in the form of bilateral agreements and/or concerted practices implemented through technical restrictions, in particular by means of geo-blocked Steam activation keys, which prevented the activation of certain of the Publishers’ PC video games outside certain Central and Eastern European countries (namely, Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania), thereby restricting cross-border sales of certain of the affected PC video games based on the geographical location of the user.

(12) In addition, the Decisions find that each of Bandai Namco, Focus Home, Koch Media and ZeniMax engaged with their respective distributors in the EEA (other than Valve) in geo-blocking practices in the form of licensing and distribution agreements containing clauses which restricted cross-border sales of the affected PC video games within the EEA.

2.3. Addressees and duration

(13) The following undertakings were found to have infringed Article 101 TFEU and Article 53 EEA Agreement by participating in the infringements during the periods indicated below: Case Undertakings (Legal entities) Duration AT.40422 – Bandai Namco Bandai Namco Holdings Inc.; Bandai Namco Entertainment Europe S.A.S. 13 March 2012 until 31 March 2015 AT.40424 - Capcom Capcom Co., Ltd.; Capcom U.S.A., Inc.; CE Europe Ltd. 13 February 2013 until 17 November 2014 AT.40413 – Focus Home Focus Home Interactive S.A. 14 March 2007 until 8 November 2018 AT.40414 – Koch Media Koch Media GmbH (Germany); Koch Media Ltd (UK); Koch Media GmbH (Austria) 20 August 2010 until 27 July 2018 AT.40420 - ZeniMax Bethesda Softworks LLC; ZeniMax Europe Ltd.; ZeniMax Media Inc. 1 September 2009 until 9 October 2015 AT.40422 – Bandai Namco AT.40424 – Capcom AT.40413 – Focus Home AT.40414 – Koch Media AT.40420 - ZeniMax Valve Corporation AT.40422: 13 March 2012 until 22 April 2014 AT.40424: 13 February 2013 until 17 November 2014 AT.40413: 17 May 2013 until 9 October 2015 AT.40414: 23 August 2011 until 9 October 2015 AT.40420: 27 September 2010 until 9 October 2015

2.4. Fines

(14) The Decisions apply the 2006 Guidelines on Fines ( 3 )

2.4.1. Basic amount of the fines

(15) In setting the fines with regard to Valve, the Commission took into account the value of sales generated at EEA level by the sale on Steam of the respective Publishers’ affected PC video games during Valve’s last full business year of participation in the infringement in each of the five cases, that is 2013 in Cases AT.40422 – Bandai Namco and AT.40424 – Capcom and 2014 in Cases AT.40413 – Focus Home, AT.40414 – Koch Media and AT.40420 – ZeniMax. In order to take into account 30 % of the gross revenue on Steam related to the respective Publishers’ affected PC video games, the Commission has subtracted the respective Publishers’ share (70 %) from the total Steam revenues for the relevant Publishers’ games.

(16) In setting the fines with regard to the Publishers, the Commission took into account the value of sales generated at EEA level by each respective Publishers’ affected PC video games through both physical and digital distribution, including 70 % of the gross revenues generated by the sale of the concerned PC video games on Steam, during the last full business year of each Publisher’s respective participation in the infringements that is: — Financial year 2014 (running from 1 April 2014 to 31 March 2015) in Case AT.40422 – Bandai Namco, which was the last full business year of Bandai Namco’s participation in the single and continuous infringement; — Financial year 2013 (running from 1 April 2013 to 31 March 2014) in Case AT.40424 – Capcom, which was the last full business year of Capcom’s participation in the single and continuous infringement; — Financial year 2017 (running from 1 January 2017 to 31 March 2018) in Case AT.40413 - Focus Home, which was the last full business year of Focus Home’s participation in the single and continuous infringement; — Financial year 2017 (running from 1 April 2017 to 31 March 2018) in Case AT.40414 – Koch Media, which was the last full business year of Koch Media’s participation in the single and continuous infringement; — Financial year 2014 (running from 1 January 2014 to 31 December 2014) in Case AT.40420 – ZeniMax, which was the last full business year of ZeniMax’s participation in the single and continuous infringement.

(17) The Commission took into account the fact that each of the different restrictions, by their very nature, restricts competition within the meaning of Article 101(1) TFEU and Article 53 of the EEA Agreement and that vertical agreements and concerted practices such as those at issue are, by their nature, often less damaging to competition than horizontal agreements. Taking into account these factors and in light of the specific circumstances of each case, the proportion of values of sales taken into account was set at 7 % for each of Bandai Namco, Focus Home, Koch Media and ZeniMax and at 6 % for each of Capcom and Valve (for each of the five infringements).

(18) The Commission took into account the duration of the single and continuous infringements, as mentioned above.

2.4.2. Adjustments to the basic amount

(19) There are no aggravating or mitigating circumstances in these cases.

2.4.3. Application of the 10 % turnover limit

(20) The calculated fines do not exceed 10 % of each of the Parties’ worldwide turnover.

2.4.4. Reduction of the fines in view of cooperation

(21) The Commission concluded that, in order to reflect that each of the Publishers have effectively cooperated with the Commission beyond their legal obligation to do so, the fines that would otherwise have been imposed should, pursuant to point 37 of the Guidelines on Fines, be reduced by 10 % vis-à-vis Bandai Namco, Focus Home, Koch Media and ZeniMax and by 15 % vis-à-vis Capcom.

3. CONCLUSION

(22) In light of the above, the final amounts of the fines imposed on the Parties pursuant to Article 23(2) of Regulation (EC) No 1/2003 for the single and continuous infringements amount to the following: Case Undertaking Fine AT.40422 – Bandai Namco Bandai Namco EUR 340 000 AT.40424 - Capcom Capcom EUR 396 000 AT.40413 – Focus Home Focus Home EUR 2 888 000 AT.40414 – Koch Media Koch Media EUR 977 000 AT.40420 - ZeniMax ZeniMax EUR 1 664 000 AT.40422 – Bandai Namco AT.40424 – Capcom AT.40413 – Focus Home AT.40414 – Koch Media AT.40420 - ZeniMax Valve EUR 1 624 000 , broken down as follows: EUR 31 000 , for the infringement in Case AT.40 422 – Bandai Namco EUR 90 000 , for the infringement in Case AT.40 424 – Capcom EUR 102 000 , for the infringement in Case AT.40 413 – Focus Home; EUR 308 000 , for the infringement in Case AT.40 414 – Koch Media EUR 1 093 000 , for the infringement in Case AT.40 420 - ZeniMax

(1) OJ L 1, 4.1.2003, p. 1.

(2) Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18).

(3) Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ C 210, 1.9.2006, p. 2).