There’s been a lot of commentary about competition law (or antitrust law, as it’s known in the USA) and the games industry over the last week or so, focusing in particular on Valve and Microsoft. This is a post to explain why that’s a non-story.
First, a number of people drew my attention to a series of consumer complaints about Valve’s Steam digital distribution platforms. These complaints ranged from pointing to price differentials between US/European and different European countries’ pricing of games (see for example here), to complaints about specific games being withheld or delayed from release in particular countries. I was asked about whether this is anti-competitive.
Then Eurogamer and other sites like Edge ran a story about Microsoft’s allegedly restrictive content and release policy. Basically, they argued that Microsoft is trying to control how its developer partners can release their games, particularly on other consoles/platforms. Sony subsequently hit out at Microsoft over this (more here). Again, various people began commenting about whether Microsoft is engaged in anti-competitive activity.
Answer: sorry, these are non-stories. Competition regulators are unlikely to get involved here. To explain why, a (European) competition law #101 follows.
Competition law #101:
EU competition law exists to ensure a level playing field between competing businesses. It isn’t there to ensure the consumer always gets the best deal (ideally that’s the conclusion of a good competition law system, but it’s not guaranteed). In legal terms, the EU focuses primarily on regulating: (1) agreements between businesses in the EU which harm competition in the EU (e.g. companies colluding together to fix prices artificially high); and (2) a business in the EU which is in a dominant market position abusing that position (e.g. a market leading business dictating how consumers in different EU countries can purchase products for its own benefit). Critically, there are complicated tests to establish if/when a business falls under these kinds of regulation (which is why knee-jerk yes/no answers don’t really help).
Separately, we have consumer protection law, which regulates how businesses behave more generally towards consumers. For example, consumer protection law requires that a game actually works and broadly speaking that it matches the pre-purchase promises made about it. However, there are real legal uncertainties about how they apply to digital – the current laws are designed to protect physical goods and services, not intangible digital content. While over time this will get clarified (the UK government is looking into it at the moment, for example), it means you can’t really make comments of the ‘X or Y is definitely illegal’ without looking into it closely and potentially having a legal dispute over it.
Oh, and there’s little point comparing the US and European approaches to these matters- they are entirely different legal systems. An argument along the lines of “X costs Y in the US but Z in Europe” generally won’t get a consumer very far, therefore.