Judge Denies Valve’s Request to End Antitrust Case
(Image: Steam)A federal judge has ruled that an antitrust case targeting Valve’s “written and unwritten” pricing policies may continue, despite the distributor’s best attempts to shut it down.
The antitrust lawsuit itself began early last year, when developer Wolfire Games claimed Valve was using Steam’s dominance in the PC game market to take “an extraordinarily high cut” (30 percent) from every sale. Since 75 percent of PC game sales occur on Steam, Wolfire argued, Valve is uniquely positioned to exploit both developers and consumers by ensuring they won’t be able to sell titles for a better price elsewhere. This, combined with the 30 percent commission, results in a faster-than-usual increase in game prices. (Anyone who’s watched games shoot from $50 to $60 to $70 a pop in recent years can feel those effects, regardless of who’s at fault.) Wolfire also accused the distributor of maintaining its “dominance” in the market by ensuring Steam Keys—unique codes entered into Steam in return for a copy of a game—are not sold elsewhere for a cheaper price than what Steam itself sells the same title for.
Valve responded a couple months later with a motion to dismiss the lawsuit, saying the 30 percent cut was set back when the company was founded in 2003. Valve insisted this commission was competitive, saying it had become the “industry standard” for games distributors. It also stated it had “no duty under antitrust law to allow developers to use free Steam Keys to undersell prices for the games they sell on Steam,” rebuffing the point that its Steam Keys create an unfair advantage in the PC gaming market. While Valve denied the claim that it conducted 75 percent of all PC game sales, it didn’t offer up a corrected figure, either.
At first it appeared as though Valve’s wishes would be granted. The court stated in December that Wolfire had “not [articulated] sufficient facts to plausibly allege an antitrust injury” and “partially” granted Valve’s motion for dismissal. But the court provided space for Wolfire to amend its complaint with further context, which the developer has since provided. Now, after nearly escaping unscathed, Valve will be required to defend its policies via oral argument.
The back-and-forth over commission is reminiscent of that which occurred between Epic Games and Apple, Google, and yes, also Steam. Four years ago, Epic took issue with these platforms’ 30 percent commission and argued in favor of a lower one, like its own 12 percent cut. The fallout was lengthy, and as of this writing, Epic titles like Fortnite are still absent from the Apple App Store and Google Play store. Epic is also continuing to suffer the financial fallout from ditching Steam, despite having made its own alternative store called the Epic Games Store.