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Valve and five PC games publishers fined $9.4M for illegal geo-blocking

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A four-year antitrust investigation into PC games geo-blocking in the European Union by distribution platform Valve and five games publishers has led to fines totalling €7.8 million (~$9.4M) after the Commission confirmed today that the bloc’s rules had been breached.

The geo-blocking practices investigated since 2017 concerned around 100 PC video games of different genres, including sports, simulation and action games.

In addition to Valve — which has been fined just over €1.6M — the five sanctioned games publishers are: Bandai Namco (fined €340k), Capcom (€396k), Focus Home (€2.8M), Koch Media (€977k) and ZeniMax (€1.6M).

The Commission said the fines were reduced by between 10% and 15% owing to cooperation from the companies, with the exception of Valve who it said chose not to cooperate (a “prohibition Decision” rather than a fine reduction was applied in its case).

Valve has been contacted for comment.

The antitrust investigation begun in February 2017, with a formal statement of objections issued just over two years later when the Commission accused the companies of “entering into bilateral agreements to prevent consumers from purchasing and using PC video games acquired elsewhere than in their country of residence” in contravention of EU rules.

The mechanisms used by the companies to prevent certain cross-border sales of certain PC games were geo-blocked Steam activation keys and bilateral licensing and distribution agreements to restrict certain cross-border sales.

EU lawmakers has now found that these business practices partitioned certain European markets according to national borders — denying regional consumers the benefits of the EU’s Digital Single Market to shop around for the best offer.

Commenting in a statement, EVP Margrethe Vestager, who heads up competition policy for the bloc, said: “Today’s sanctions against the ‘geo-blocking’ practices of Valve and five PC video game publishers serve as a reminder that under EU competition law, companies are prohibited from contractually restricting cross-border sales. Such practices deprive European consumers of the benefits of the EU Digital Single Market and of the opportunity to shop around for the most suitable offer in the EU.”.

According to the Commission’s investigation, geo-blocking of Steam activation keys prevented activation of certain of the five games’ publishers titles outside of Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania.

It said agreements between the companies to geo-block activation keys had lasted between one and five years and were found to have been implemented at various times between September 2010 and October 2015.

While four of the games publishers (not Capcom) were found to have entered into licensing and distribution agreements with various PC games distributors (not Value) in the European Economic Area (EEA) which contained clauses which restricted cross-border sales of the affected titles within the EEA, including the aforementioned Central and Eastern European countries.

The Commission said these agreements lasted generally longer (“between three and 11 years”), and were implemented at different times between March 2007 and November 2018.

Since the investigation started, EU lawmakers have passed a regulation against unjustified geo-blocking. Although the legislation only applies to PC video games distributed on CDs or DVDs, not to downloads. So games are only partially covered.

A Commission review of how the geo-blocking regulation is operating, published last November, discussed a possible extension of its scope in a range of areas, including for games. However it did not make a strong case for that change. (It also found demand for cross-border access to games (and software generally) relatively low vs other content services.)

But while games distributed via digital downloads look set to remain outside the scope of the EU’s unjustified geo-blocking regulation, the fines against Valve et al show that geo-blocking can still be a legal minefield as contractual agreements to restrict cross-border sales run counter to the bloc’s antitrust rules.

The specific breaches are of Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area which prohibit agreements between companies that prevent, restrict or distort competition within the EU’s Single Market, per the Commission.

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Comcast hides upload speeds deep inside its infuriating ordering system

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An NBC peacock logo is on the loose and hiding behind the corner of a brick building.

Enlarge (credit: Aurich Lawson / Getty Images)

Comcast just released a 2020 Network Performance Data report with stats on how much Internet usage rose during the pandemic, and it said that upload use is growing faster than download use. “Peak downstream traffic in 2020 increased approximately 38 percent over 2019 levels and peak upstream traffic increased approximately 56 percent over 2019 levels,” Comcast said.

But while upload use on Comcast’s network quickly grows—driven largely by videoconferencing among people working and learning at home—the nation’s largest home-Internet provider with over 30 million customers advertises its speed tiers as if uploading doesn’t exist. Comcast’s 56 percent increase in upstream traffic made me wonder if the company will increase upload speeds any time soon, so I checked out the Xfinity website today to see the current upload speeds. Getting that information was even more difficult than I expected.

The Xfinity website advertises cable-Internet plans with download speeds starting at 25Mbps without mentioning that upstream speeds are just a fraction of the downstream ones. I went through Comcast’s online ordering system today and found no mention of upload speeds anywhere. Even clicking “pricing & other info” and “view plan details” links to read the fine print on various Internet plans didn’t reveal upload speeds.

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Bank of America is bringing VR instruction to its 4,000 banks

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As consumer VR begins to have a moment following years of heavy investment from Facebook and other tech giants, corporate America is similarly beginning to find more utility in the technology, as well.

Bank of America announced today that they’ll be working with Bay Area-based VR startup Strivr to bring more of their workplace training into virtual reality. The financial institution has already used the startup’s tech in a pilot effort with about 400 employees, but a wide-scale rollout means scaling the VR learning platform to more of the company’s 45,000 employees and bringing thousands of VR headsets to its bank branches.

Bank of America exec John Jordan has plenty of ideas of where it will be able to implement the technology most effectively, but is open to experimenting early-on, noting that they’ve developed VR lessons for everything from notary services to fraud detection. Jordan also says that they’re working on more ambitious tasks like helping employees practice empathy with customers dealing with sensitive matters like the death of a relative.

Jordan says the scope of the company’s corporate learning program “The Academy” is largely unmatched among other major companies in the U.S., except perhaps by the employee instruction programs at Walmart, he notes. Walmart has been Strivr’s largest customer since the startup signed the retail behemoth back in 2017 to bring VR instruction to their 200 “Walmart Academy” instruction centers and all Walmart stores.

Virtual reality is a technology that lends itself to capturing undivided attention, something that is undoubtedly positive for increasing learning retention, which Jordan says was one of the central appeals for adopting the tech. For Bank of America, VR offers a platform change to reexamine some of the pitfalls of conventional corporate learning. At the same time, they acknowledge that the tech isn’t a silver bullet and that are plenty of best practices for VR that are still unknowns.

“We’re just taking it slow to be honest,” Jordan says. “We already feel pretty great about how we’ve made investments, but we view this as a way to get better.”

Enterprise VR startups have seen varying levels of success over the years as they’ve aimed to find paying customers that can tolerate the limitations of the technology while buying in on the broader vision. Strivr has raised over $51 million, including a $30 million Series B last year, as it has aimed to become a leader in the workplace training space. CEO Derek Belch tells TechCrunch that the company has big plans as it looks towards raising more funding and works to build out its software toolsets to help simplify VR content creation for its partners.

 

 

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Cashify raises $15 million for its second-hand smartphone business in India

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Tens of millions of people each year purchase a second-hand smartphone in India, the world’s second largest market. Phone makers and giant online sellers such as Amazon and Flipkart are aware of it, but it’s too much of a hassle for them to inspect, repair, and resell used phones. But these firms also know that customers are more likely to buy a smartphone if they are offered the ability to trade-in their existing handsets.

A startup that is helping these firms tackle this challenge said on Thursday it has raised $15 million in a new financing round. New York-based Olympus Capital Asia made the investment through Asia Environmental Partners, a fund dedicated to the environmental sector. The five-year-old startup, which counts Blume Ventures  among its early investors, has raised $42 million to date.

Cashify operates an eponymous platform — both online and physical stores and kiosks — for users to sell and buy used smartphones, tablets, smartwatches, laptops, desktops, and gaming consoles. 90% of its business today surrounds the smartphone category, explained Mandeep Manocha, founder and chief executive of Cashify, in an interview with TechCrunch.

“For consumers, our proposition is that we make it easy for you to sell your devices. You come to our site or app, answer questions to objectively evaluate the condition of your device, and we give you an estimate of how much your gadget is worth,” he said. “If you like the price, we pick it up from your doorstep and give you instant cash.”

A few years ago, I wrote about the struggle e-commerce firms face globally in handling returned items. There are many liability challenges — such as having to ensure that the innards in a returned smartphone haven’t been tempered with — as well as overhead costs in reversing an order.

Manocha said that phone makers and e-commerce firms have found better ways to handle returned items in recent years, but they still lose a significant amount of money on them. These challenges have created a big opportunity for startups such as Cashify.

In fact, Cashify says it’s the market leader in its category in India. The startup has partnerships with “nearly every OEM” including Apple, Samsung, OnePlus, Oppo, Xiaomi, Vivo, and HP. “If you walk into an Apple store today, they use our platform.” For consumers in India, if they opted for the trade-in program, Apple.com also uses Cashify’s trading platform, he said.

The startup also works with top e-commerce firms in India — Amazon, Flipkart, and Paytm Mall. The firms use Cashify’s trading and exchange software, and also rely on the startup for liquidation of devices. The startup then repairs these gadgets and sells the refurbished units to customers.

“Essentially, whether you come directly to us, or go to popular e-commerce firms or phone OEMs, we are handling the majority of the trading,” he said. Even if a customer trades in the device to OEMs, or e-commerce firms, these companies sell the device to players like Cashify, which serves over 2 million customers in more than 1,500 cities.

The startup plans to deploy part of the fresh capital to expand its presence in the offline market. Manocha said Cashify currently has dozens of offline stores and kiosks at shopping malls across the country and it has already proven immensely effective in brand awareness among customers.

The startup also plans to expand outside of India, hire more talent, and invest more in getting the word out about its offerings. Manocha said the team is also working on expanding its expertise to more hardware categories such as cameras.

“The management team at Cashify has an excellent track record in building a strong consumer-facing franchise and building relationships with OEMs, e-commerce companies and electronic product retailers to be present across all touch points for the consumer,” said Pankaj Ghai, Managing Director of Asia Environmental Partners, in a statement.

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