Class action suit accuses Valve of using its ‘dominant’ position in the marketplace to drive up prices

    
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So steamy.

It’s an understood fact of PC gaming life that the Steam platform is the standard for digital games storefronts, and it’s that position of power that has lead five gamers to file a class action lawsuit this past Thursday against Valve, claiming that the company is abusing its power to mark up the prices of PC games.

“Valve Corporation’s Steam platform is the dominant platform for game developers to distribute and sell PC games in the United States, but the Steam platform does not maintain its dominance through better pricing than by rival platforms. Instead, Valve abuses the Steam platform’s market power by requiring game developers to enter into a ‘Most Favored Nations’ provision contained in the Steam Distribution Agreement whereby the game developers agree that the price of a PC game on the Steam platform will be the same price the game developers sell their PC games on other platforms.”

According to the suit, this agreement effectively stymies competition and innovation, which in turn means that games prices are never allowed to be lower. “If this market functioned properly […] platforms competing with Steam would be able to provide the same (or higher) margins to game developers while simultaneously providing lower prices to consumers,” reasons the complaint.

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Schmidt.Capela

In the research I did, the “most favored nation” clause that I found Steam has isn’t related to price, but to quality and content: if you sell a game on both Steam and competing platforms then you must offer on Steam a product with at least the same quality, and amount of content — including in the availability of DLC — as in competing platforms.

Now, I’m not saying that a price-based MFN clause doesn’t exist on Steam, but Steam lists over 6K publishers selling games on its store, each of which has access to, and had to agree to, the distribution agreement; even if the agreement is under an NDA, it feels like a stretch to assume any clause that is reviled by a significant number of publishers wouldn’t have leaked by now.

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Zuldar

Yeah, can’t see this working out too well for them. Probably a good example though of why you always want to hire a reputable lawyer if you’re going to sue someone.

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Dankey Kang

I don’t see much of an issue really; nobody buys full price games from Steam, only sale stuff and get the rest from CDkeys which is usually 20-80% cheaper.

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Phubarrh

Sounds like somebody’s been drinking too much Mountain Dew.

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Bryan Correll

Hey! I may drink a lot of Diet Mountain Dew but…….wait, I don’t think you meant me.

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Hikari Kenzaki

Mt Dew Zero Sugar is better, but they only put a couple of packs of it on the shelf a week. :)

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Hareikan

Weird. I don’t love steam, ngl I dont think steam is that much better than Epic, but this whole lawsuit seems a bit wobbly. I don’t have enough knowledge to gauge if this claim is true or not, but if it is, I can see why they might sue. Either way, monopoly is never good for the consumers.

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Slaasher

What monopoly? Steam, Epic, GoG, Discord…….

MilitiaMasterV
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MilitiaMasterV

Pretty much the whole reason I’ve boycott the company/refused to get an account/use it…because they were trying to run a monopoly which allows one to control pricing…

The sad thing is, it’s made me miss out on quite a few games that steam-exclusived themselves…

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Bryan Correll

Is Epic funding their legal team?

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Rndomuser

No surprises here. Valve is an extremely greedy company, and even without such requirement for game developers, their prices for many games are sometimes higher than on other platforms. Combining this with the revenue share they use (which is 30% unless the game makes $10 million and higher) it makes me look at other platforms first when shopping for new games – I will gladly buy game at GOG (their revenue share is same but they at least have good customer support and allow full game downloads and downloads of patches without using their own launcher) or Epic store first if the price is similar or lower at those stores. Especially since I don’t care about social fluff in Valve’s game launcher – all I need game launcher for is to use it for launching the game and updating it, for everything else there is Discord.

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Schmidt.Capela

Valve is an extremely greedy company, and even without such requirement for game developers, their prices for many games are sometimes higher than on other platforms

You are aware that this torpedoes the central argument of the lawsuit, which is that Valve forces all publishers and devs who want to sell on Steam to never sell anywhere else for a lower price, right?

Epic store first

The utter jerks who resort to anti-competitive exclusivity deals? If I could force those clowns to close down I would, even if that took the Unreal engine with it; in my view, the Epic Store (and the way it normalizes the idea of exclusives) does far more damage to the gaming industry than any good their other operations could ever do.

Which is ironic in that had Epic never used exclusivity deals I would be supporting their store, at least up to a point (I still see the lack of customer reviews as a blatant attempt to shift power from customers to publishers, which coupled with the other features absent from the Epic store would make me always prefer Steam if prices were the same). More choices of where to purchase any single game are always good.

Oh, BTW, my store of choice is GOG; if given the choice I’ll always prefer DRM-free. But of all the stores that do employ DRM the one I prefer, by a long margin, is Steam.

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Jeremy Barnes

Preparing my shocked face when sweeney is found out to be involved somehow like when Peter Thiel didn’t like Gawker and financed Hulk Hogan’s lawsuit against them.

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Axetwin .

Considering how many people seem to think Valve has a monopoly on the PC market with Steam, this lawsuit isn’t all that surprising. Completely idiotic, but unsurprising.

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Schmidt.Capela

As far as I can tell Valve intentionally avoids anti-competitive behavior, otherwise it would indeed be a de-facto monopoly. I mean, can you imagine any other store trying to compete with Steam if Valve weaponized exclusivity deals the way Epic is doing?