Valve is facing a lawsuit over Steam market dominance

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Published by FileTrekker 1 month ago , last updated 1 month ago

Valve is facing down a lawsuit which was filed earlier this week, alleging the company is using its effective monopoly and market dominance to inflate the price of digital game sales by forcing developers to sell the game at the same price on other storefronts as they are offered on Steam. 

To explain, Valve force developers to match the price of a game on Steam to the cheapest price on any other storefront, meaning developers cannot put the game on sale elsewhere without also doing so on Steam, for example. This "Most Favoured Nations" provision in the contract is the source of the lawsuit.

According to the suit, this "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" and that it 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."

The suit also names other storefront owners including CD Projekt Red (GOG.com) and Ubisoft, stating 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 suit points out that the Epic Games Store and the Microsoft Store both do not follow this practice and also takes a smaller cut of sales, and cites a tweet from Epic's Tim Sweeney which points out that Valve has control over other storefronts, and can simply say "no" to any planned sales on other stores.

The goal of the suit is to find against Steam's MFN clause as "anticompetitive" and force an injunction against this and other similar actions, along with financial damages and legal costs.

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