Valve lawsuit calls Steam a ‘monopoly’

Steam-Uses-Regional-Pricing-To-Add-Value

A Valve lawsuit is on the horizon, attacking them with monopoly charges. The fine details note that the company is using its position to keep game prices high.

A filing came early this week that accuses Valve, together with other devs, of a practical monopoly of the PC gaming landscape.

The Valve lawsuit says the digital storefront pushes companies to drive prices up with its Most Favored Nations clause.

Valve provision allegedly creates high prices

The Most Favored Nations clause is found under the Steam Distribution Agreement.

The provision notes that the client, Steam, will receive the best terms available everywhere else. The provision allows the company to have an equal or lower price point.

In simpler terms, Steam always wants to have the same or lower price for their games. A multi-platform game dev cannot charge consumers lower for their products on other platforms such as Epic or Windows Store.

The issue here is that Steam takes as much as 30% from the devs. Platforms like Epic take only 12% from devs but can’t sell for lower except during sales.

The lawsuit notes that Valve is preventing lower prices at other storefronts due to MFN.

“The MFN [Most Favored Nations clause] has the effect of keeping prices to consumers high, as price competition by platforms would cause the prices of PC games sold to consumers to decrease,” the lawsuit said, which is on The Hollywood Reporter.

“The MFN also hinders innovation and suppresses output, as it acts as an additional barrier to entry by potential rival platforms and as higher prices lead to less sales of PC games.”

Lawsuit tangles other dev teams for collusion

The Valve lawsuit does not focus on Steam alone. It tangles other studios as defendants, including CD Projekt Red, Ubisoft, kChamp Games, Rust LTD, and Devolver Digital, with the lawsuit notes potential collusion from these devs.

The suit notes that the companies “unlawfully contracted, combined, or conspired to unreasonably restrain trade in violation of Section 1 of the Sherman Act by agreeing under the Steam MFN that the game developer Defendants would not sell their PC game products through competing platforms at a price lower than what they offered through Valve’s Steam platform.”

The lawsuit seeks to rule the MFN as “anticompetitive and constitutes illegal monopolization and monopoly maintenance.” Even then, there are a few holes in the case as it is.

The suit names the above studios for starters and yet doesn’t tangle others who agreed to Steam’s SDA.

The Valve lawsuit also doesn’t account for Epic exclusive titles that still sell at market price even without the SDA, including Hitman 3.

Featured image courtesy of Valve/YouTube Screenshot

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