Valve Is Getting Sued For Abusing Steam To Keep PC Game Prices High
The lawsuit alleges that Valve Inc. is abusing Steam "by creating an artificial barrier to entry" for game developers.
Valve Inc. finds another lawsuit on its desk as a putative class action filed earlier this week alleges that the video gaming giant is abusing Steam by requiring developers to sell their games at the same price across all platforms once it enters the PC game distributor's store.
The suit, spotted by The Hollywood Reporter and handled by attorneys at the Ohio-based law firm Vorys Sater, states that Valve's "Most Favored Nations" clause in its Steam Distribution Agreement forces developers to 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." The attorneys note that Valve is abusing the MFN clause by making it difficult for other platforms--such as the Epic Games Store, itch.io, and Microsoft Store--to compete against Steam.
"The Steam MFN also hinders innovation by creating an artificial barrier to entry for platforms," the lawsuit claims. "When a market, such as this one, is highly concentrated, a new entrant can benefit consumers by undercutting the incumbent’s prices. The ability to provide PC games to consumers at lower prices is one way a firm or new entrant could gain market share. If this market functioned properly--that is, if the Steam MFN did not exist and platforms were able to compete on price--platforms competing with Steam would be able to provide the same (or higher) margins to game developers while simultaneously providing lower prices to consumers."
The focus of the lawsuit centers on game developers and consumers, as it notes Valve's Steam is the "dominant platform for game developers to distribute and sell PC games" to people. Because of Steam's ubiquity, the attorneys seek to disrupt Steam's market hold in order to make PC game distribution and selling more equitable for makers and players.
This lawsuit comes not long after Valve Inc. was accused of ripping off a patent the company ended up implementing in its now-discontinued Steam Controller. The lawsuit points out specifically the rear-sided paddles on the controller. It did not make mention of the trackpad-style control on its face, which contrasted it greatly with practically every other controller compatible with Steam.
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