Valve Loses Bid To End Antitrust Case Over Steam Gaming Platform (bloomberglaw.com) 42
An anonymous reader quotes a report from Bloomberg Law: Valve must face antitrust litigation over claims that "most favored nation" policies for its Steam distribution platform have driven up video game prices across the industry, a federal judge in Seattle ruled. Judge John C. Coughenour let part of the case move forward in the U.S. District Court for the Western District of Washington, saying it's plausible Valve exploits its market dominance to threaten and retaliate against developers that sell games for less through other retailers or platforms.
The company "allegedly enforces this regime through a combination of written and unwritten rules" imposing its own conditions on how even "non-Steam-enabled games are sold and priced," Coughenour wrote. "These allegations are sufficient to plausibly allege unlawful conduct." The May 6 decision hands a win to the consumers and game publishers leading the proposed class action after the judge twice issued preliminary rulings in Valve's favor. Coughenour first ordered Steam subscribers to arbitrate their consumer claims in October, then tentatively dismissed the developer lawsuit the following month. Consumers who don't subscribe to Steam -- and never signed its arbitration agreement -- are still involved in the case. [...]
Coughenour trimmed the Valve case May 6, rejecting claims that the Steam store and gaming platform operate in separate markets the company ties together. There are no plausible allegations of any consumer demand for "fully functional gaming platforms distinct from game stores," he said. But the judge let the most-favored-nation claims move forward, walking back his earlier skepticism about the idea that Steam commissions are "supracompetitive." He had previously found that their stability over time shows Valve didn't raise prices as it gained market share. In fact, when the company competed only against brick-and-mortar retailers, it "did not need market power to charge a fee well above its cost structure because those brick-and-mortar competitors had a far higher cost structure," Coughenour wrote. That makes the analysis apples-to-oranges, he said.
The company "allegedly enforces this regime through a combination of written and unwritten rules" imposing its own conditions on how even "non-Steam-enabled games are sold and priced," Coughenour wrote. "These allegations are sufficient to plausibly allege unlawful conduct." The May 6 decision hands a win to the consumers and game publishers leading the proposed class action after the judge twice issued preliminary rulings in Valve's favor. Coughenour first ordered Steam subscribers to arbitrate their consumer claims in October, then tentatively dismissed the developer lawsuit the following month. Consumers who don't subscribe to Steam -- and never signed its arbitration agreement -- are still involved in the case. [...]
Coughenour trimmed the Valve case May 6, rejecting claims that the Steam store and gaming platform operate in separate markets the company ties together. There are no plausible allegations of any consumer demand for "fully functional gaming platforms distinct from game stores," he said. But the judge let the most-favored-nation claims move forward, walking back his earlier skepticism about the idea that Steam commissions are "supracompetitive." He had previously found that their stability over time shows Valve didn't raise prices as it gained market share. In fact, when the company competed only against brick-and-mortar retailers, it "did not need market power to charge a fee well above its cost structure because those brick-and-mortar competitors had a far higher cost structure," Coughenour wrote. That makes the analysis apples-to-oranges, he said.
Just like a lot of other online retailers (Score:2, Troll)
you originally didn't have to pay taxes on Steam games. Still the claim that they helped inflate prices across all platforms is fucking stupid - unless they are trying to argue that it was so lucrative all the publishers started trying to ape them (they did, and all of them are shit by comparison), which drove up prices.
But, how is that their fault? I'd also love to see examples of other publishers and stores backing that shit up, especially with what they told their shareholders in 10-Ks.
Frankly I'm surp
Re: Just like a lot of other online retailers (Score:1)
Re: Just like a lot of other online retailers (Score:2)
This of course is why Epic exclusives are cheaper. Wait... no they're not. How much are you being paid for shilling for Epic?
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Something that automatically stacks the deck in favour of the the richer party, because they often can keep the trials going until the other party is bled dry.
And while Valve certainly has the money to eventually come out on top there, why even risk having to pay that much if you could have the case thrown out in the first place?
Steam pricing issues (Score:4, Insightful)
If they prevented publishers/developers from pricing and selling for less elsewhere -- that's a legitimate complaint, and Valve has sufficient market share to basically abuse that power. I think its fair to look at that and investigate whether they abused that power.
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It's really no more anticompetitive than an exclusivity deal, which the industry is rife with, but Valve is in a sticky position because they're overwhelmingly dominant in terms of market share.
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That's still pretty flatly anticompetitive.
It's really no more anticompetitive than an exclusivity deal, which the industry is rife with, but Valve is in a sticky position because they're overwhelmingly dominant in terms of market share.
It's far less anticompetitive than an exclusivity deal. "You can sell anywhere you want, at the same price or higher than you sell through us" - so the publisher could capture that 30% margin for themselves/someone else, or even more by selling for more.
If they could undercut, they could effectively use the Steam platform for marketing, but somewhere else for sales. Set a very high price on Steam, show off the game, tell everyone it's 80% less somewhere else.
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You come out of the gate claiming it's less anticompetitive, and then give several reasons for why it would suck for Valve, but none of them actually support your claim that it's less anticompetitive.
It is by definition anticompetitive.
The end result is that prices that are inflated on Steam due to Steam policies are forced to be inflated elsewhere. That is precisely the kind of thing that antitrust laws were designed to combat.
I agree that you can't simply unroll the policies and have the r
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Steam provides exposure that it's hard to do without, but they literally do nothing at all to you if you sell on other platforms. They do have exclusives but they're not making anybody sign such an agreement. It's hard to argue that Steam is anticompetitive, and in fact even the judge in this case rejected some of the arguments and has waffled on others. They don't have an actual monopoly, they don't abuse their dominant market position... all that's even being argued any more is that they've driven up pric
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Steam provides exposure that it's hard to do without, but they literally do nothing at all to you if you sell on other platforms.
I'm going to stop you right there.
If you are a market leader, and you use your leadership in the market in an anticompetitive nature, you are running afoul of the Sherman Act, period, full stop.
No monopoly is required.
This action, legitimate as it may be, is illegal. It prevents Valve_Competitor_1 from being a service where a lower price can be found, for example, by charging less than 30% in commission.
The Judge rejected attempts to frame relevant markets in some creative ways. But the antitrust arg
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If it's actually happening, then sure, it's anticompetitive. I don't care frankly whether someone has a dominant market position or not, punishing someone for offering a product at a lower price elsewhere is indefensible. I just want to know it's real before I get emotionally engaged.
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My Steam Deck is on pre-order, I've got an Index, and I've got ~1600 paid games, including just about every AAA title ever shipped, on the platform that probably costed somewhere around 30-50k USD over the last 17 years.
I'm heavily invested in them. I wish I'd spent most of that money on GOG instead, but I didn't, and I can't undo that. But I'm financially invested i
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Yeah, I can't bring myself to spend much money on Steam games. I don't remember ever paying full price for one, and most of my library came from bundles. Not only don't I want to encourage them, but DRM.
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Hard to say whether you're deliberately trolling or mentally ill / impaired and posting unsupervised.
The list of games for sale on GOG, GreenManGaming, Humble Store and others have great commonality with steam. Those platforms are also much smaller. Forced to choose, any honest mind would be forced to accept that virtually all publishers would choose the by-far biggest platform. The virtual nonexistence of game sales on other platforms would go very far in preventing those platforms from existing, and hence
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The list of games for sale on GOG, GreenManGaming, Humble Store and others have great commonality with steam. Those platforms are also much smaller. Forced to choose, any honest mind would be forced to accept that virtually all publishers would choose the by-far biggest platform. The virtual nonexistence of game sales on other platforms would go very far in preventing those platforms from existing, and hence competition from existing.
Your argument appears to be, that if there is a near-monopoly on retail, no one will use anyone anything else. It's a waste of time trying to tell you that's a stupid fucking opinion.
When those platforms instead exist, they can also compete on other features than price. The ability to compete on the vast range of dimensions other than price (community, brand, affiliation) increases competition relative to not existing at all.
This isn't relevant in the slightest.
Stores are very commonly unable to compete on every dimension. Two grocery stores may be forced to sell the same bottles of Coke, without any realistic ability to negotiate custom Coke designs. They can instead compete on every other dimension, like layout, furnishings, branding and more. The inability to compete on one dimension does not preclude the ability to compete on other dimensions, and the ability to compete on other dimensions fosters competition.
You know what those stores can do? They can sell them at different prices.
Your argument succeeds in pointing out several things that are simply irrelevant. It doesn't matter what ways Valve_Competitor_1 can compete. It only matters that Valve makes it impossible for them to compete in a si
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When your claim was shown to be wrong, you simply abandoned it completely. You didn't admit fault or defend it, you simply stopped repeating it.
This is good in that it indirectly shows you admit you were clueless about what you were speaking about, but it's bad in what it says about the speaker.
As already pointed out in the opening comment: a most-favored nation clause is far less anti-competitive than an exclusivity agreement, because a most-favored nation clause allows competition on a vast range of dimen
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When your claim was shown to be wrong, you simply abandoned it completely. You didn't admit fault or defend it, you simply stopped repeating it.
Mmmh, begging the question. You're so clever.
I present to you an alternate version of events:
Your retort was trash, and I cherry picked a few parts of it that didn't involve the claim to respond to.
This is good in that it indirectly shows you admit you were clueless about what you were speaking about, but it's bad in what it says about the speaker.
Proceeding with an argument from a false premise is pretty fucking pointless.
As already pointed out in the opening comment: a most-favored nation clause is far less anti-competitive than an exclusivity agreement, because a most-favored nation clause allows competition on a vast range of dimensions that an exclusivity agreement doesn't. This ability to compete isn't irrelevant, it's actually extremely relevant and core to the court trial that will take place.
It is not relevant. What is relevant is whether or not it's anticompetitive. You will show that yourself in just a second.
"Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable. For instance, in some sense, an agreement between two individuals to form a partnership restrains trade, but may not do so unreasonably, and thus may be lawful under the antitrust laws."
Indeed they did. The precedent sets 3 ways of assessing violations of the Sherman Act. 2 of them matter to us her
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So yes, it's the price you pay, but it's an illegal price. They will lose this.
Steam doesn't "host the multiplayer networks". Steam offers a matchmaking API. Let's not church this up.
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Not the brightest tool in the shed, are you?
"Your honor- the plaintiff fully agreed to let me murder their family if they didn't pay on time."
Valve is absolutely in a dominant enough position to fall subject to the Clayton and Sherman Acts. That means that things which are legal for smaller companies to do will not be legal for them. Anticompetitive things, specifically.
Re: Steam pricing issues (Score:2)
No they won't. Vertical most favored nation arrangements are largely accepted as legal so long as you didn't have a monopoly or major market power at the time it was instituted. So this entire lawsuit will effectively hinge on whether when Valve folded WON into Steam that the games affected constituted major market power. At the time it was done, the only games that was still remotely consideted large in the multiplayer scene that used WON were Counterstrike and to a much lesser extent Half Life. So now, Wo
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If a jury finds that the MFN clause is responsible for maintaining Valve's market share, it will be illegal.
MFN-in-the-pursuit-of-fairness is generally regarded as OK. MFN-in-the-pursuit-of-non-competition is statutorily not.
Re: Steam pricing issues (Score:2)
Only if they were a major market power at the time when the vertical mfn was instituted. So you have to argue that A) Half Life 1 and Counterstrike in 2004 made them a major market power and B) that it even applies since both those games were owned by Valve at the time amd the only other games folded in were a couple smaller games whose online numbers had largely dropped off by that point in time.
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There's nothing in the statute or the case law that I'm aware of that says they must have been major at the time of institution. It only matters that it is a) anticompetitive, and b) intentionally thus, because ultimately, statutorily, that is directly illegal. The judicial side requires a test of "reasonable-ness" of the anticompetitive behavior, and I don't really see anything that suggest the timeline matters- only the de facto reality of the effect of the anticompetitive behavior.
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If they prevented publishers/developers from pricing and selling for less elsewhere
This is not a legitimate complaint... Ever heard of "price match" in most stores? Its the same thing except its retail initiated vs consumer. When Walmart says we will match any other competitors lower price, they basically push that cost back to the supplier. "Our customer showed us you sold your product for less at a competitor, please cover the diff."
Of course this mitigated by different "product numbers" and vendor doesn't need to match special sales. The online guys just went and made it far more
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If they prevented publishers/developers from pricing and selling for less elsewhere -- that's a legitimate complaint, and Valve has sufficient market share to basically abuse that power. I think its fair to look at that and investigate whether they abused that power.
"If" is the operative word. Given that I can buy steam keys from 3rd party sellers that work on steam, I'd say that is a fairly solid no. Also Steam are not the only store, Epic are trying to undercut steam something shocking, the problem is people aren't moving because, well, steam is good.
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While I agree with your comments, this case is quite likely for a time period several years ago. The landscape in 2007 was quite different than 2014 and different again in 2022...
Also (the legitimate) 3rd party stores selling steam keys is honestly a bit unclear to me, its still preserves steams marketshare on the backend, and I don't know what the terms are that humblestore and greenmangaming actually work on in terms of revenue sharing with steam.
MFNs should be illegal across the board (Score:4, Insightful)
Any contact clause where a retailer says "you can't sell xyz elsewhere cheaper than you sell it here" should be outright illegal IMO, whether its video games, music, apps, ebooks, hotel rooms, airline tickets or any other good or service.
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Would be interesting, as the US Government use this clause a lot in their purchase agreements
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