Valve abusing the market power of Steam on game pricing according to a lawsuit

It's 3 people that have bought games on Steam for themselves, and 2 people that have bought games on Steam for their children (which they think means they aren't themselves subject to the Steam Subscriber Agreement, despite them necessarily checking the box to say that they are). They aren't the sharpest pencils in the box.

How disappointing.

Took me until I read the actual filing to realise that the 5 plaintiffs where all gamers, I for some reason thought that they where game developers.

Are you sure about this? That does make the whole thing indeed sound incredibly weird.

Yes, it's always on the very first page. Those are just five random people. The whole lawsuit is "Epic is better, Steam is bad."

Here's the lawyer that wrote this suit...

https://www.vorys.com/mccormick

Took me until I read the actual filing to realise that the 5 plaintiffs where all gamers, I for some reason thought that they where game developers.

Are you sure about this? That does make the whole thing indeed sound incredibly weird.

It's 3 people that have bought games on Steam for themselves, and 2 people that have bought games on Steam for their children (which they think means they aren't themselves subject to the Steam Subscriber Agreement, despite them necessarily checking the box to say that they are). They aren't the sharpest pencils in the box.

Just to clarify, as explained in the video above, the 2 adults are buying games for their minor children on the accounts of their children. The lawsuit doesn't stipulate the age of the children but Steam does not allow children 13 and under to have an account. That muddies the water a lot.

Huh. Well, I guess if the allegation is true, that Valve's secret contracts involve making developers not sell their games cheaper anywhere else as a condition of being able to sell on Steam, that's kind of anti-competitive in that it stops other stores from trying to gain market share by underselling Steam. And if you foreclose on the whole concept of competition on price, that's likely to be bad for consumers.

Given the high hurdles in US antitrust law, even if the allegation is true that might well not be enough for Valve to actually lose the lawsuit, as noted by EagleDelta etc. But it's still a practice I'd find somewhat annoying--sure, you can understand why they'd want to do it, but then it's easy to understand why any company would do any anti-competitive practice . . . no company wants to be successfully competed against.

Of course if it ain't true then the filers are just assholes. And whether it's true or not, the filers could have questionable motivations and backing.

If you watch the video I linked, he talks about how MFNs are actually fairly standard across several industries. Additionally, without seeing the contracts, which I might add may require permission from the game developers to show, we only have the SteamWorks docs to go off. The video author noted that the contents there are not written in a way that constitutes an MFN. It's pretty much a "We don't know" right now.

Agreed! The video is very much worth a watch if anyone is truly interested in the legalities and details. There is is a strong legal argument for Valve having crossed some legal lines with their market share influence. But as the lawyer in the video explains that area in general is very gray.

The lawsuit further muddies the issue by naming several game publishers in the lawsuit including CD Projekt, Ubisoft, and several others. They claim these publishers have colluded with Valve while also being the victims of Valve which is an awkward position to sell.

There isn't much evidence actually presented by the case outside of economic theorizing and Tim Sweeney tweets. However the one part of the case, concerning Valve's market share influence, does have some evidence and statements by a Valve employee that support their claim that Valve is misusing its market dominance. Again, the problem being that there are many factors the claimants will need to clarify and solidly support in order for them to win unless they get a very sympathetic judge and jury.

TL;DR - watch the video because it is informative.


Last edited by randyl on 2 February 2021 at 5:24 pm UTC

Personally I think Valve does this to prevent companies to sabotage steam by selling their games at higher price on purpose.

Imagine for ExamPle If a Competitor make a shady contract with the biggest dev companies, and the next hyped game would cost $40,00 in others stores and $65,00 on steam, where do you think most of the sales would happen?

If I'm not mistake, Valve also have a clause forbidding dlc to not be selling through steam if they're available in other stores , which was one of the reasons that made EA left Steam back then

Personally I think Valve does this to prevent companies to sabotage steam by selling their games at higher price on purpose.

You don't even know if Valve is actually doing this.

If I'm not mistake, Valve also have a clause forbidding dlc to not be selling through steam if they're available in other stores , which was one of the reasons that made EA left Steam back then

EA sold Mass Effect through Steam, but they wanted to sell their DLC for those games with their own stuff, thus bypassing Steam. That's what Valve is not allowing.

Imagine for ExamPle If a Competitor make a shady contract with the biggest dev companies, and the next hyped game would cost $40,00 in others stores and $65,00 on steam, where do you think most of the sales would happen?

Make it 60$ on other stores and 75$ on Steam and then we have something close to what would actually happen. Once people decided that the game is worth 60$ why would publishers decrease that price? Philantrophy? If anything they will increase it where they want to discourage the sells. In this case people would learn fo the game on Steam, get angry at the price, goodle and then learn that the desired price(sticky price) is available elsewhere.

I don't see any reason to expect that developers would suddenly raise their prices on one platform because they can lower their prices on another.

<...>

Most likely scenario is no price changes for the most part with a few devs or publishers lowering prices on platforms with a lower cut.

... Don't you see it's the exact same thing :)

- "Hi, I am developer X. My price on my game is $40 plus platform cut."

That means they set a higher price on Steam than those platforms with a lower cut. Whether you call this to raise the price on A or lower the price on B it's the exact same thing. And that is what Steam wants to avoid. They want their users to purchase the games at the same price on their platform as the other platforms, and avoid prices on Steam being higher.
And that may very likely - or at least quite possibly - *benefit* the Steam users.


Last edited by Beamboom on 3 February 2021 at 10:18 am UTC

Funny... Thinking about it... 5 "random" (Yeah right!) gamers that seem to be unable to correctly read a EULA learned of the MFN which is closed behind an NDA between developpers and Valve... Who broke the NDA then? Will the plantiffs be able to produce the proof of the MFN without compromising the identity of the NDA leaker(s)? Because that could legally cost them a lot. Like it was said... Follow the money.

Did I get something wrong?


Last edited by Mohandevir on 3 February 2021 at 1:51 pm UTC

If anything they will increase it where they want to discourage the sells.

That was my point with my post (I don't know if it was clear)

You don't even know if Valve is actually doing this.

You don't know either, I'm only saying what I think about this case, based on
hypothesis that such a clause exists

Personally I think

If anything they will increase it where they want to discourage the sells.

That was my point with my post (I don't know if it was clear)

Yeah, but the standard, typical, universally agreed fair price is that an AAA game costs 60. What they costs now, costed yesterday and will cost tomorrow (unless horrible avg income crisis happen). So when you say 65 on Steam and 40 on else, without specifing the context, it looks like you're impling that prices are going to diminish outside Steam, with benefits for consumers.

I guess your example was on an indie title, where yeah 40 or 30 are typically accepted as fair prices. In that case yeah, the example makes sense. But imho an example is more effective if it's simple.


Last edited by Mal on 3 February 2021 at 3:51 pm UTC

Yeah, but the standard, typical, universally agreed fair price is that an AAA game costs 60. What they costs now, costed yesterday and will cost tomorrow (unless horrible avg income crisis happen). So when you say 65 on Steam and 40 on else, without specifing the context, it looks like you're impling that prices are going to diminish outside Steam, with benefits for consumers.

I guess your example was on an indie title, where yeah 40 or 30 are typically accepted as fair prices. In that case yeah, the example makes sense. But imho an example is more effective if it's simple.

I gave $60 as an example, I don't know the standard price for AAA games in North America and Europe, since I don't live in neither (all I know is that they're relatively cheap)

I'll try again: Let's say hypothetically Epic, EA, Ubisoft, Activision, Bethesda, Rockstar, Microsoft and Satan wants to make some kind of "informal cartel" with the purpose of undermining the monopoly of Steam, by selling their games at lower price in their stores and more expensive (on purpose) at Steam.

If they want to do something similar to this, they can't because hypothetically Valve has a clause in the contract preventing their prices to be higher than those other stores.

Of course you can ask "but if they simply stop to sell their games at steam, wouldn't be easier?"

the funny thing about the consumers, is that if you simply remove the games from steam, they'll complain about not been available there and a lot of them probably wouldn't buy anyway in protest (depending of the game of course).

But if they're available at steam (being more expensive) and cheaper in other stores, a lot of people would prefer the other stores (depending of the difference)

At long term, this could make an impression that steam is "the most expensive store" resulting in a considerable lost of steam only costumers and fragmentation of available games through stores

Funny... Thinking about it... 5 "random" (Yeah right!) gamers that seem to be unable to correctly read a EULA learned of the MFN which is closed behind an NDA between developpers and Valve... Who broke the NDA then? Will the plantiffs be able to produce the proof of the MFN without compromising the identity of the NDA leaker(s)? Because that could legally cost them a lot. Like it was said... Follow the money.

Did I get something wrong?

That one thing is no problem for the plaintiffs, if this goes to court then Valve will be forced to disclose the MFN to the court and to the plaintiffs during the discovery phase. So there is no need to produce who was the leaker, however the court could of course deem that this whole affair is nothing more than a fishing expedition to make the MFN public so the whole thing can die right there.

Funny... Thinking about it... 5 "random" (Yeah right!) gamers that seem to be unable to correctly read a EULA learned of the MFN which is closed behind an NDA between developpers and Valve... Who broke the NDA then? Will the plantiffs be able to produce the proof of the MFN without compromising the identity of the NDA leaker(s)? Because that could legally cost them a lot. Like it was said... Follow the money.

Did I get something wrong?

That one thing is no problem for the plaintiffs, if this goes to court then Valve will be forced to disclose the MFN to the court and to the plaintiffs during the discovery phase. So there is no need to produce who was the leaker, however the court could of course deem that this whole affair is nothing more than a fishing expedition to make the MFN public so the whole thing can die right there.

This is not accurate. There is no "MFN". An "MFN" isn't a contract in and of itself. There is a contractual agreement with an NDA (non-disclosure agreement) between Valve and the publisher. This may or may not be introduced, but it isn't an absolute given and the plaintiffs don't necessarily have the ability to include that. The fact that they didn't include it in the complaint, and the implication behind that, was discussed in the video.

The contract between Valve and the publishers/developers may have clauses or stipulations which give an "MFN" status and that has to be determined during the hearing. And then it has to be proven to be proven unfavorable to consumers. And then they have to prove that Valve and those publishers colluded to set prices to the detriment of the public while also harming those publishers who colluded to set prices.

The video linked earlier in the article is really worth watching. It helps clarify a lot and can eliminate some of our lay assumptions and understandings. A lot of the comments in this thread are emotionally based on what posters think should happen, but the court proceedings will be based on law and precedence.

Funny... Thinking about it... 5 "random" (Yeah right!) gamers that seem to be unable to correctly read a EULA learned of the MFN which is closed behind an NDA between developpers and Valve... Who broke the NDA then? Will the plantiffs be able to produce the proof of the MFN without compromising the identity of the NDA leaker(s)? Because that could legally cost them a lot. Like it was said... Follow the money.

Did I get something wrong?

That one thing is no problem for the plaintiffs, if this goes to court then Valve will be forced to disclose the MFN to the court and to the plaintiffs during the discovery phase. So there is no need to produce who was the leaker, however the court could of course deem that this whole affair is nothing more than a fishing expedition to make the MFN public so the whole thing can die right there.

This is not accurate. There is no "MFN". An "MFN" isn't a contract in and of itself. There is a contractual agreement with an NDA (non-disclosure agreement) between Valve and the publisher. This may or may not be introduced, but it isn't an absolute given and the plaintiffs don't necessarily have the ability to include that. The fact that they didn't include it in the complaint, and the implication behind that, was discussed in the video.

The contract between Valve and the publishers/developers may have clauses or stipulations which give an "MFN" status and that has to be determined during the hearing. And then it has to be proven to be proven unfavorable to consumers. And then they have to prove that Valve and those publishers colluded to set prices to the detriment of the public while also harming those publishers who colluded to set prices.

The video linked earlier in the article is really worth watching. It helps clarify a lot and can eliminate some of our lay assumptions and understandings. A lot of the comments in this thread are emotionally based on what posters think should happen, but the court proceedings will be based on law and precedence.

I fail to see how you contradict me in any way?

edit: sounds like you have a problem with me using "MFN" for the Valve vs Developer agreement, I simply used that in haste due to the post that I quoted, the context should IMHO be clear however.


Last edited by F.Ultra on 4 February 2021 at 5:40 pm UTC

The contract between Valve and the publishers/developers may have clauses or stipulations which give an "MFN" status and that has to be determined during the hearing.

Aaaah! MFN is a term used to qualify a situation... They want to convince the court that some part of Valve's contract acts like a MFN. Is that so?

Edit: For the record... Don't know why I haven't tought about that in the first place:

https://en.wikipedia.org/wiki/Most_favoured_nation


Last edited by Mohandevir on 4 February 2021 at 6:46 pm UTC

Whats the fuss about? Steam is giving out free keys to the devs with the only catch that they may not sell them lower than they do on steam (with details on sales etc) - while steam still has the same infrastructure-costs for those keys.

I really wouldn't be surprised if Sweeny "motivated" those 5 guys to initiate such a dumb lawsuit that costs us taxpayers unnecessary money -.-

As expected. I thought I was going to agree with this article but it seems it's same old swine wanting to have his apple and eat it too.

The contract between Valve and the publishers/developers may have clauses or stipulations which give an "MFN" status and that has to be determined during the hearing.

Aaaah! MFN is a term used to qualify a situation... They want to convince the court that some part of Valve's contract acts like a MFN. Is that so?

Edit: For the record... Don't know why I haven't tought about that in the first place:

https://en.wikipedia.org/wiki/Most_favoured_nation

This seems to be so and more so that if their contract has an MFN clause that it harms both consumers and developers. If you have the time to listen to the YouTube video that was posted earlier the lawyer explains what this is and how it could apply to Valve. He goes over the highlights of the law suit and explains what it means legally and what it might mean for Valve or the plaintiff.


Last edited by randyl on 5 February 2021 at 6:58 am UTC

The contract between Valve and the publishers/developers may have clauses or stipulations which give an "MFN" status and that has to be determined during the hearing.

Aaaah! MFN is a term used to qualify a situation... They want to convince the court that some part of Valve's contract acts like a MFN. Is that so?

Edit: For the record... Don't know why I haven't tought about that in the first place:

https://en.wikipedia.org/wiki/Most_favoured_nation

This seems to be so and more so that if their contract has an MFN clause that it harms both consumers and developers. If you have the time to listen to the YouTube video that was posted earlier the lawyer explains what this is and how it could apply to Valve. He goes over the highlights of the law suit and explains what it means legally and what it might mean for Valve or the plaintiff.

I think it's probably worth a watch, and I actually started . . . but it's a frigging hour, man!

I think it's probably worth a watch, and I actually started . . . but it's a frigging hour, man!

You can always download the legal documents and read through hundreds of pages full of jargon and rethorics.