The Polish Competition Authority ("PCA") has opened a preliminary investigation into suspected anti-competitive conduct in the video games industry, including at PlayStation Store and Steam.

The PCA has already inspected the headquarters of a Sony group company and two video game developers and publishers in Poland.

What does the PCA suspect?

According to the press release, the PCA is concerned about the distribution of non-box (digital) games on the online platforms. Particularly, the following types of conduct may be antitrust relevant:

• restricting the possibility of selling games and downloadable content (DLC) on competing platforms or online stores,
• tampering with developers’ and publishers’ pricing and rebating policies,
• foreclosing the market for competing platforms and digital content providers.

According to the PCA, such conduct could constitute anti-competitive agreements or an abuse of a dominant position by video games digital distribution platforms that could exclude other platforms, exploit game developers and publishers, and lead to higher prices for players.

Why Poland?

The Polish gaming market is a success story. Twenty years ago, while still having a post-communist economy, the country did not miss out on the dawn of the digital era, and local developers ambitiously jumped in on the race with the most advanced markets. In 2007, with the release of the first “Witcher”, the Polish industry became a serious competitor of the US, UK and German industries. According to the report “The Game Industry of Poland” (2023) published by the Polish Agency for Enterprise Development, Poland is the second-largest game releaser worldwide and Europe’s second-largest gaming employer. In 2022, the industry’s revenue exceeded €1.2 billion. And global game developers are now opening their own studios in Poland.

No wonder that this sector, which has become an important building-block of the national economy, is now attracting the attention of the regulators, including the competition authority. Polish gaming has remained highly competitive, and its roughly 500 developers and publishers seem to have benefited fairly equally from the industry’s dynamic growth. Maintaining and fostering of competition, then, falls within the public interest.

Why now?

Little is known yet about the investigation, which is in its nascent stage. Legally speaking, the PCA has opened a preliminary proceeding to initially determine whether an antitrust violation has occurred, and whether the case is of an antitrust character. For now, proceedings are not being conducted against any particular companies.

It also seems the investigation may be inspired to some extent by similar actions taken by competition authorities in other jurisdictions, such as against Sony (PlayStation) in France and Romania, and the EU’s Valve (Steam) case. The Polish investigation could also send a signal to other EU competition enforcers if it is conducted on the suspicion of a violation of Art. 101 and/or 102 TFEU (which is likely to be the case), for then it should be notified to the ECN members under Art. 11(3) of Regulation 1/2003.

Interestingly, shortly before the PCA announced its investigation Polish gamers were criticising price hikes on Steam. It was even reported that game prices in Poland are comparable to those in Switzerland, when Polish gamers have much less purchasing power. However, as the PCA usually announces the inspections some time after having carried them out, the new investigation is unlikely to be linked to the complaints of Polish gamers.

A procedural titbit

From the scarce information the PCA has communicated, we also know that the PCA entered the premises of three companies, namely, a local subsidiary of Sony and two developers/publishers. Officials inspected those entities in the capacity of a control (kontrola) rather than a search (przeszukanie), though the latter is more commonly used.

Having two types of inspections is specific to Poland. A search requires prior judicial authorisation and is more intrusive for the inspected party – officials are allowed to overcome any resistance by the company and to inspect its premises by themselves. A control assumes cooperation by the inspected party, which must allow the officials access to the evidence they ask for.

While officials’ powers are more limited during a control, they have more flexibility regarding their purpose, and this is probably what they need most in this first Polish antitrust probe in the gaming sector.

What’s next?

The PCA is reviewing the evidence it gathered, and the outcome of its analysis will determine what happens next. If it finds that there has been an antitrust violation, it will open antimonopoly proceedings, issuing statements of objection to specific companies.

Given the specifics of the gaming sector, especially the distribution of digital games and DLC, this case could have far-reaching impact, for it could affect not just the targeted companies, but the functioning of the entire industry - in Poland as well as in other jurisdictions.

If you need more information or further guidance in this area, please contact Szymon Golebiowski.

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