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Steam again at the center of scandal: Valve sued over «abuse of market power»31.01.2021 [21:14],
A class action lawsuit has been filed against Valve alleging that the company is «abusing the market power of the Steam platform» to prevent other game distribution platforms such as the Epic Games Store and Microsoft Store from selling cheaper. It happened on Thursday: some five gamers filed a class action lawsuit against Valve Corporation in federal court in California.
As reported by The Hollywood Reporter, the lawsuit concerns a clause in the distribution agreement for Steam products, which obliges to sell games on other platforms at no cheaper than on the Steam store.
“The ability to provide consumers with PC games at lower prices is one way a firm or newbie can gain market share. If this market functioned properly — that is, if the MFN [Most Favored Trade] on Steam did not exist and platforms could compete in prices — platforms competing with Steam could provide game developers with the same (or more high) margins while providing lower prices for consumers, ”the lawsuit says.
In addition to Valve, the lawsuit on the defendants side includes several developers who have signed the Steam distribution agreement, including CD Projekt, Ubisoft, kChamp Games, Rust LLC and Devolver Digital.
The lawsuit seeks to rule that the MFN clause on Steam is “anti-competitive and constitutes illegal monopolization and maintenance of a monopoly” and an injunction against further anti-competitive actions, financial damage and legal costs. It is unclear why Ubisoft, CD Projekt, Devolver Digital and several indie studios are co-accused in the lawsuit, but there are no others who have ever agreed to a Steam distribution agreement (and there are countless companies).
It is also not entirely clear how this supposedly anti-competitive clause works in practice, since many games on other sites during sales and other promotions can be found cheaper than on Steam. It probably only covers the initial cost of the product. In addition, removal of this clause from Valve’s agreement will not automatically translate into lower prices at other stores. Even if the Epic Games Store lowers its share of sales, game developers and publishers may simply decide to keep a profit, rather than make the product cheaper for the consumer.
Epic Games Store founder Tim Sweeney has previously scolded Valve for this developer policy.
Steam has veto power over prices, so if a multi-store developer wishes to sell their game for a lower price on the Epic Games store than Steam, then:
1) Valve can simply say “no”
2) Pricing disparity would likely anger Steam users, leading to review bombing, etc
— Tim Sweeney (@TimSweeneyEpic) January 30, 2021
“Steam has a veto on prices, so if a developer wants to sell their game on the Epic Games store at a lower price than on Steam, then: 1) Valve can simply say no; 2) the mismatch in prices is likely to anger Steam users, leading to a bombardment of reviews and the like, «he wrote on January 30, 2021.