Apple attempts to draw Valve into its legal fight with Epic Games via a sales data subpoena

Take a wild guess how Valve reacted

    
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If that headline reads like things in the Epic vs. Apple vs. Google case are getting messy, well, yes. Let’s try to break this down as best as we can: A joint discovery letter filed this past Thursday to the District court in Northern California revealed that Apple had subpoenaed Valve Software in November 2020, asking that Valve provide a truly massive stack of sales data for use in the Apple/Epic Games suits and countersuits.

Specifically, Apple sought documents that provide details like total yearly sales of apps and in-app purchases, annual revenues from Steam, and annual earnings from Steam, along with “the name of each App on Steam; the date range when the App was available on Steam; and the price of the App and any in-app product available on Steam.” The request initially sought this information for over 30,000 games on Steam but eventually narrowed down that figure to about 600.

As one might expect, Valve has pushed back against Apple’s subpoena, arguing that the demands imposed “too heavy a burden” and that Apple has not shown a substantial need for the data it demands.

“Apple was not satisfied and demands — without offering to cover Valve’s costs, which would be significant — that Valve recreate six years’ worth of PC game and item sales for hundreds of third party video games, then produce a massive amount of confidential information about these games and Valve’s revenues.

“Apple wrongly claims those requests are narrow. They are not. […] Somehow, in a dispute over mobile apps, a maker of PC games that does not compete in the mobile market or sell ‘apps’ is being portrayed as a key figure. It’s not.”

Valve is asking that the court throw Apple’s subpoena out.

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Ernost
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Ernost

WTF? How is this even legal? Steam has nothing to do with this Circus.

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SmiteDoctor

Help me out here, how the hell can Apple subpoena Steam regarding a case that has nothing to do with Steam; I’d tell them to go f them selves and the judge too that rubber stamped this BS.

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Schmidt.Capela

It’s because Apple is fighting for the broadest possible definition of what the market is for the purpose of the monopoly/anti-competition claims, since the broader the market definition is, the less teeth those claims have. So Apple wants data from Steam so they can prove that Steam also competes with the App Store.

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SmiteDoctor

Steam is a private company, or a public company that only has a responsibility towards it’s majority share holders; there is no legal reason why they should be compelled to give up their confidential information to a competitor to make it easier for them to cement a monopoly. Seriously who the fuck does Apple think it is, I’d stonewall that request for years while publicly rubbing it in Apple’s face for the audacity of Apple’s expectations.

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Scorp Gang

This has nothing to do with GabeN and his Flock. Leave us out of it.

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Bruno Brito

And this shit is happening simply because Epic didn’t want to make a Phonenite to compete directly, instead trying to win through litigation.

I can only imagine how much money they’re saving, because their sense of shame was spent already.

umdiddly
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umdiddly

In the court of my public opinion, Apple is in the wrong. No distributor should have such a commanding control of the market.

A strong and free market would be one where profiteering middle-men are squeezed out, intrinsically. As it stands right now, the Apple stores, Google plays, and steams of the world control far too much and contribute far too little.

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Bruno Brito

I’m not debating whether Apple is right or wrong for being a control freak. I’m debating that this is NOT free market ( which i’m totally opposed for, but that’s neither here nor there ), because Epic is doing litigation as a way of conquering that slice of the market, AND that Epic is not an hero in this case.

Also, let’s remember something: Apple has total control on Apple gadgets. Let’s not pretend they have a global monopoly here.

allwynd01
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allwynd01

Apple is hardly a gaming platform outside iOS so I don’t see why Valve would care about them.

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Bryan Correll

Valve doesn’t ‘care’ about Apple. And they certainly don’t have any love for Epic. But Valve has not been part of this particular circus and Apple is trying to drag them in. What they do care about is keeping their own data confidential and certainly don’t want to open their books over a fight they aren’t part of.

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Mark Jacobs

And the time/money/headache involved in defending their data as they said. Gabe has been rather restrained response-wise after Tim started the Epic Store and throwing lots of shade at Steam and paying big money to get content. I can’t imagine he wants to now get dragged into a fight started by Tim when Gabe has a lot to lose by simply being a part of it.

Now, this tactic by Apple is not surprising but that doesn’t mean Gabe wants anything to do with it. :)

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Anstalt

I really don’t think Apple wants to get Valve / Steam involved here.

Whilst both are similar in that they take 30% cut, steam is not a monopoly, there are loads of other digital distribution channels for buying games on PC, steam doesn’t take any cut from in-game microtransactions and even more telling: Epic Games store hasn’t really hurt steam at all.

That said, I do want to see all the data Apple asked for, it’d be interesting!

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EmberStar

I don’t know about in general, but I do know of two examples where Steam benefits from game-related microtransactions. The first are Steam Cards, where Steam takes a cut of every sale, even user-to-user. (And because reasons I don’t completely care about, is apparently part of why they’ve put more restrictions on doing so – something something money laundering, apparently.)

The second is when in-game currency or cosmetics are purchased through Steam. The example I’m familiar with here is Warframe. If you buy a Platinum bundle or Tennogen cosmetic item through Steam, Valve takes their normal percentage. Once the platinum (cash store currency) is inside the game economy they’re no longer involved. The difference here is that you can go to the Warframe site and choose from several *other* options to buy the currency. (But not the Tennogen cosmetic items, which are part of a system hosted by Valve. On PC they can *only* be purchased through Steam.)

I’m neither a lawyer nor a financial expert. To me this seems like Apple going fishing and trying to find an excuse to get financial date Valve otherwise has no obligation to share. Or it could be that Apple is simply incredibly stupid and is actually *trying* to get Valve on the same side as Epic in this slop fight. As a legally untrained non-expert, it seems like the *last* thing you’d want in a messy corporate kaiju fight is to wake up another monster and force them to join in. They most likely aren’t going to be on your side if you do that.

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Anstalt

Good points, Steam definitely can benefit from related purchases, but I feel like it’s making the opposite point from the one Apple want to make.

Steam offer a platform for selling digital games and related items. If you want to sell through steam and take advantage of both their existing client base plus all of their infrastructure for payments, then you pay Valve 30%

However, if you don’t want to use Steam, either for the game or for the microtransaction, you don’t have to. You can setup your own store, sell direct, use another store or whatever. Lots of options.

So, Apple asking for data on steam, to me, seems like asking for evidence that your opponent, Epic, is right!

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EmberStar

“However, if you don’t want to use Steam, either for the game or for the microtransaction, you don’t have to. You can setup your own store, sell direct, use another store or whatever. Lots of options. ”

More than that, you can use Steam *and* have your own payment processing system. That’s literally what Warframe does – you can buy Platinum through Steam, OR you can buy it directly from Digital Extremes (the company that develops Warframe.) And then use the cash shop currency in the version of Warframe that you log into via Steam. (Or use the standalone or even… bleh… Epic Store versions of the Warframe launcher.)

Which seems like kind of exactly NOT what Apple does, and the alleged core of their fight with Epic. IE, that Apple is claiming that Epic does NOT have the right to sell things directly to customers, but must be required to go through Apple.

But as I said, I’m not a lawyer, on top of the fact that I barely care about this case beyond the popcorn value. It’s entirely possible I simply don’t understand some nuance of Apple’s point here.

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Darthbawl

This gonna get ugly LOL.

tenor.gif
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Mark Jacobs

Yeah, there’s a lot of chatter in the industry and VCs about how this case is going. And it’s not good.

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Schmidt.Capela

Didn’t the judge indicate that a decision against Apple’s walled garden might serve as precedent against other walled gardens too, such as consoles?

I would love a result in which users were given the right to install on their devices software and games from any supplier, where manufacturers such as Apple, Sony, Nintendo, etc, were forced to allow competing stores on their devices, but that would be a seismic shift for the market and cause a lot of confusion.

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Schmidt.Capela

Apple likely wants to expand the definition of “market” for the purposes of the monopoly/anti-competitive claims in the lawsuit as much as possible, because the larger the courts determine the market to be, the less monopoly power they will attribute to Apple, which on Apple’s best case scenario might even completely defuse that part of Epic’s lawsuit regardless of anything else.

Also, there’s some suspicion that Apple is using the lawsuit to obtain data about Steam; companies can usually find lots of information about current and potential competitors from their shareholder presentations, but since Steam doesn’t have shareholders it isn’t legally required to ever make such information publicly available.

The lack of reporting duties due to being a privately owned company is also part of Steam’s defense here; it’s basically saying that a lot of information that other companies would need to collect and keep simply aren’t needed for Steam, since it has no reporting duties, and as such Steam doesn’t even bother collecting that information.

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John Kiser

It really comes across like apple is desperate to try and claim a competitive marketplace when they literally have no competition in their marketplace on their own platform and actively block things like game streaming services and the like. They want to be the defacto marketplace for any and all gaming and steam has nothing to do with competition at all toward them on iOS/tvOS. While Steam exists on MacOS yeah the entire lawsuit has nothing to do with MacOS where steam exists at all.

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Schmidt.Capela

This is where the definition of what consists the market matters.

If the market is defined as just apps and games for Apple-manufactured devices then Apple is a de-facto monopoly; it’s the only player even allowed into the market.

If the market is defined as apps and games for mobile devices then Apple is still a very important player, but it’s not even the largest one in that space anymore, so it becomes much harder to argue that Apple has monopoly power.

If the definition of the market is broadened to include the PC — which seems to be what Apple wants, based on the subpoena — then Apple is a minor player without the power to actually cause market damage.

The definition of what is the market for the purpose of this lawsuit hasn’t been made yet, so Epic and Apple will fight over that definition. Epic wants the definition to be just Apple devices; Apple seems to want it to be everything that can run a game. I’m not sure what would be the fairest definition, though, because apps from the App Store now run unmodified on the newer Macs, so the test I would otherwise suggest — taking the Apple devices that natively run App Store apps, and extending to similar devices from other manufacturers — would include basically every smartphone, tablet, smart TV, and computer.

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John Kiser

Apple’s trying to broaden the market to be more than it is realistically and anyone should be able to see past that farce. The market they are in is purely on iOS devices plain and simple in regards to this which is why they are trying to widen the scope of “their market” to basically include shit outside of the realm that Epic etc are complaining about.

They want the definition of market skewed so they can try and make it out that there is a ton of competition when in fact they have no competitors on the platform that Epic and others are complaining about. It is basically a smoke and mirrors type of deal to distract from what the lawsuit is actually about.

Even if you were to take the unmodified apps being able to run on Mac devices Steam would be a minor player and there is really no one else outside of like. GoG exists, but isn’t the be all end all and their move to quell 32 bit pulled quite a few games until some developers were able to move onto unofficial wineskin ports for their games. They want to spread it out so competition expressly looks better, but they are being disingenuous.

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Schmidt.Capela

If you go that route, then the Playstation, the XBox, and the Switch are all monopolies that ought to be tamped down in the same way. Which is something Epic is explicitly arguing against, likely because it knows that picking a fight against all console makers and the two main app stores at the same time would be disastrous.

And sincerely, no, I don’t think you can isolate Apple devices from other competing devices of the same class. Because to do so would be saying that no other smart device competes with the Apple ones. A smartphone from Samsung, Huawai, XiaoMi, Sony, Asus, etc, is a perfectly valid substitute (and, often, a much better value proposition) than an Apple-branded phone.

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Bryan Correll

Steam doesn’t even bother collecting that information

I’m pretty sure they do for their own internal analytics. And they want to keep it internal.