It’s not a great day to be Valve. The company is being sued in the United Kingdom for $843 million over accusations that it leveraged its position wht Steam to screw over the competition and fleece gamers.
Vicki Shotbolt of children’s digital rights campaigner filed the lawsuit citing that Valve overcharges 14 million PC gamers and abuses its dominant position in the UK.
The drama on this one is hype.
“Companies who hold a dominant position in a market are not allowed to charge excessive or anti-competitive prices,” Milberg said at steamyouoweus.co.uk, a website dedicated to the lawsuit. “They also cannot impose other unfair trading conditions that prevent or hinder others from competing with them.
“We believe Valve Corporation has been unfairly shutting out competition for PC games and in-game content, which has meant that UK customers have paid too much for these products.”
And, there’s more.
The lawsuit claims that Steam has allowed Valve to exist in such way by charging commissions up to 30% to game publishers. And this, they say, is a charge that gets passed on to consumers.
Here’s the what you need to know:
Valve imposes price parity obligation clauses on developers, preventing lower prices on other platforms.
Add-on content for games purchased on Steam must also be purchased through Steam (tying).
Valve’s cut on all sales through Steam, known as the “excessive commission,” has led to excessive pricing on games.
And this isn’t Valve’s first run in with legal woes.
In 2018, Valve was fined $2.4 million in Australia for Steam’s lack of a refund policy before 2015.
In 2023, Valve faced a $1.73 million fine for “geo-blocking” games, initially imposed in 2021.
Despite these fines, Steam’s financial impact remains minimal, with a 2023 report estimating over $9 billion in revenue for that year.
Valve has made drastic alterations to how it operates due to all of this, but it hasn’t helped take the pressure off.
In the fall of 2023, Valve’s head honcho, Gabe Newell, testified in an antitrust lawsuit that’s eerily like the one he’s entangled in this morning.
Filed by Wolfire Games in 2021, the lawsuit alleges Valve uses Steam to suppress competition in the PC gaming market.
Valve is accused of extracting “an extraordinarily high cut from nearly every sale that passes through its store.
“A separate 2021 lawsuit targets the “Most Favored Nation” clause in the Steam Distribution Contract, which allegedly prevents developers from offering lower prices on other platforms.
The newest legal action is a collective action which is pretty much like a class action as the attorney reps a group of persons. And in this case, that’s millions and millions of Steam users.
Valve Corporation, founded in 1996 by former Microsoft employees Gabe Newell and Mike Harrington, is a renowned video game developer and digital distribution company. Valve quickly gained fame with the release of its debut game, “Half-Life,” in 1998, which set new standards for first-person shooters. Following this success, Valve launched the digital distribution platform Steam in 2003, revolutionizing the way PC games are sold and played. Steam became a dominant force in the market, offering a vast library of games and community features.