A new lawsuit was filed earlier this month in the UK that alleges Valve, owner of Steam, has been overcharging 14 million PC gamers and abusing its dominant position in the UK.
The first point is one we’ve heard repeated many times before, but there’s never been any proof on it. Which perhaps the Wolfire lawsuit and this may actually bring to light. An accusation doesn’t necessarily mean they’re right though. Something people get confused on often is Steam Keys, which are completely separate to Steam Store purchases.
Saying “Don’t sell Steam keys off-platform for more than X% less than the game is priced for on Steam” and “Don’t sell your game elsewhere for more than X% less than the game is priced for on Steam“ are very different things. Steam openly does the former; I’ve never heard a reputable report of them doing the latter. The Wolfire lawsuit is explicitly about the former practice, for example.
The press release for this lawsuit reads like it’s about the latter, but I suspect that’s solely for optics. I reviewed the website dedicated to the lawsuit (steamyouoweus.co.uk) and thought they might have some more concrete evidence - nope, nothing. Under the first question in FAQs they have a link to their key documents, but the documents are “coming soon.”
Until they actually substantiate their claim, this lawsuit is just noise.
Thank you! That document is exactly the sort of thing I was looking for. Just realized (after writing most of this comment) that it’s for Wolfire and not Vicki Shotbolt’s case, but the commentary’s still relevant, I think.
There’s enough there that they may have a legitimate case, but there’s also a lot that is, as far as I know, completely acceptable for Valve to do. The specific items you listed, as well as a couple before / after them, are the most promising, IMO, but even so, there are a couple different counter-arguments that I could see Valve making.
The first counter-argument would be that the comments in 204-205 were in the context of publishers who had already received Steam keys for the games in question and did not apply to games where the publisher had not received Steam keys.
The second counter-argument would be that Tom Giardino was not speaking to Valve’s actual policy and/or that he was making empty threats that he didn’t have the power to enforce. Tom’s still with Valve (according to https://www.valvesoftware.com/en/people) so they wouldn’t be able to show that he was fired for giving publishers incorrect information, but it would be feasible for them to have record of him having gotten disciplinary action or something along those lines. Without something like that it’s much less credible stance, but not unbelievable - they’d basically have to be admitting negligence since this is a record of the actions of a representative their company. My gut says they were at least complicit.
200 says Valve “insisted” a publisher change their price on the Discord Store but doesn’t indicate any enforcement action was taken. At first glance, 209 appeared to apply, but it, too, involves the sale of Steam keys. 230 goes into a bit more detail about 209.
I read through the filing and still don’t see any instances of a game being delisted because it was being sold for cheaper elsewhere, when Steam keys weren’t in play. A lack of enforcement action against publishers not using Steam keys who set a different price in another storefront would go a long way toward showing that Valve’s policy was only relevant when the publishers were using Steam keys.
In either case, Valve will need to make the argument that it is not anti-competitive to require publishers to agree to these terms when requesting free Steam keys.
The arguments regarding DLC exclusivity (172-184) are another area where Valve might be found to be anti-competitive. That said, I don’t think exclusive DLCs benefit consumers and I would expect Valve to argue that the intent and impact of requiring DLC be published on their platform is for consumers’ benefit. I think proving something here would be dependent on the pricing angle.
I still think Valve could argue that the intent and impact of their pricing decisions are to the benefit of consumers. The specific enforcement actions brought up were all in relation to the price of Steam keys on third-party storefronts, which I think will be held to a much lower standard than restricting the price of the game on other platforms. After all, the benefits of Steam keys aren’t intrinsic to Steam, and other platforms are free to offer a similar benefit to game publishers.
In 191, the plaintiff shows that a publisher could set the price on a rival platform at 20% less and make more profit than on Steam. However, there aren’t any examples of enforcement actions where the discount on a rival platform did not exceed a 20% difference. Ultimately, if they don’t have at least that - optimally for a game whose publisher didn’t ever receive free Steam keys - the singular statement of one of their representatives might be the only concrete evidence they have. And at that point, the argument that Tom was just making empty threats has a lot more weight.
Empty threats is an interesting concept, but ultimately the market is behaving as if the threats are sincere so whether or not Valve would follow through is irrelevent to whether the presence of a policy is an exhibition of monopolistic power. The need to see an actual example of a game being delisted for violation of the policy is a weirdly high standard of evidence, when the downstream effects of the policy are otherwise so apparent.
I guess we’ll have to hope the courts are reasonable on this (if it ever gets out of legal limbo lol).
ultimately the market is behaving as if the threats are sincere so whether or not Valve would follow through is irrelevent to whether the presence of a policy is an exhibition of monopolistic power
Courts have interpreted the anti-monopoly portion of the Sherman act, which governs antitrust law in the US, to mean that monopoly is only unlawful if the power is used in an unlawful way or if the monopoly was acquired through unlawful means.
The need to see an actual example of a game being delisted for violation of the policy is a weirdly high standard of evidence
As a smoking gun, I don’t think it’s unreasonable to ask for something like that.
If it’s a policy Valve denies and the only evidence of it existing is a single reply in a forum somewhere, then yes, I’m skeptical. And given that there are examples of companies that were willing to break explicit, defensible policies, why aren’t there examples of companies who broke these? Unless the plaintiffs bring in multiple witnesses to testify that this was the policy communicated to them or something along those lines, I can’t see the evidence that they did have this policy being more compelling than the fact that there’s a complete lack of evidence that they ever acted on it.
To be clear, I’m not saying Valve needs to have said that was the reason. But it certainly needs to look like that was the reason. If Valve can’t provide a valid reason for the termination, then that’s very compelling, and even if they can, it’ll come down to which is more believable.
The latter point is a claim in the Wolfire case, and is supposedly a term in the Steam Distribution Agreement which all publishers sign. It’s behind an NDA, though.
There is indirect evidence of this in the following: if Steam’s cut is 30%, and Epic’s is 12%, and a publisher’s own site has no platform fee… Why don’t we see gradiated pricing across these different services?
It seems like there must be some policy or threat of consequences that keeps a game’s price consistent.
I’m open to the idea steam puts restrictions on publishers. But the obvious answer would be that the publisher is taking the extra profit for themselves instead
They certainly do pocket the difference. But the point is the behavior we see is that what we would see if Steam wasn’t enforcing uniform pricing. Publishers would pick some list price on other platforms / their own sites that undercuts Steam and also gives higher margin for themselves.
E.g. a $60 game on Steam with a 30% cut nets you ~$42. If you list the game on for $50 on Epic with a 12% cut, you net $44. The price differential works in favor of the consumer and publisher, and would convince more people to buy on the high-margin platform. A greedy publisher isn’t going to keep the $60 price tag, because that just pushes consumers to buy on Steam (which has the most features).
The article also says
Saying “Don’t sell Steam keys off-platform for more than X% less than the game is priced for on Steam” and “Don’t sell your game elsewhere for more than X% less than the game is priced for on Steam“ are very different things. Steam openly does the former; I’ve never heard a reputable report of them doing the latter. The Wolfire lawsuit is explicitly about the former practice, for example.
The press release for this lawsuit reads like it’s about the latter, but I suspect that’s solely for optics. I reviewed the website dedicated to the lawsuit (steamyouoweus.co.uk) and thought they might have some more concrete evidence - nope, nothing. Under the first question in FAQs they have a link to their key documents, but the documents are “coming soon.”
Until they actually substantiate their claim, this lawsuit is just noise.
Yes, I’d like to see some proof. There is indeed some possible confusion (intentional or not).
Adding a link to my other comment: see points 204 and 205 in the filing for where it alleges Steam enforces pricing for non-key sales.
Thank you! That document is exactly the sort of thing I was looking for. Just realized (after writing most of this comment) that it’s for Wolfire and not Vicki Shotbolt’s case, but the commentary’s still relevant, I think.
There’s enough there that they may have a legitimate case, but there’s also a lot that is, as far as I know, completely acceptable for Valve to do. The specific items you listed, as well as a couple before / after them, are the most promising, IMO, but even so, there are a couple different counter-arguments that I could see Valve making.
The first counter-argument would be that the comments in 204-205 were in the context of publishers who had already received Steam keys for the games in question and did not apply to games where the publisher had not received Steam keys.
The second counter-argument would be that Tom Giardino was not speaking to Valve’s actual policy and/or that he was making empty threats that he didn’t have the power to enforce. Tom’s still with Valve (according to https://www.valvesoftware.com/en/people) so they wouldn’t be able to show that he was fired for giving publishers incorrect information, but it would be feasible for them to have record of him having gotten disciplinary action or something along those lines. Without something like that it’s much less credible stance, but not unbelievable - they’d basically have to be admitting negligence since this is a record of the actions of a representative their company. My gut says they were at least complicit.
200 says Valve “insisted” a publisher change their price on the Discord Store but doesn’t indicate any enforcement action was taken. At first glance, 209 appeared to apply, but it, too, involves the sale of Steam keys. 230 goes into a bit more detail about 209.
I read through the filing and still don’t see any instances of a game being delisted because it was being sold for cheaper elsewhere, when Steam keys weren’t in play. A lack of enforcement action against publishers not using Steam keys who set a different price in another storefront would go a long way toward showing that Valve’s policy was only relevant when the publishers were using Steam keys.
In either case, Valve will need to make the argument that it is not anti-competitive to require publishers to agree to these terms when requesting free Steam keys.
The arguments regarding DLC exclusivity (172-184) are another area where Valve might be found to be anti-competitive. That said, I don’t think exclusive DLCs benefit consumers and I would expect Valve to argue that the intent and impact of requiring DLC be published on their platform is for consumers’ benefit. I think proving something here would be dependent on the pricing angle.
I still think Valve could argue that the intent and impact of their pricing decisions are to the benefit of consumers. The specific enforcement actions brought up were all in relation to the price of Steam keys on third-party storefronts, which I think will be held to a much lower standard than restricting the price of the game on other platforms. After all, the benefits of Steam keys aren’t intrinsic to Steam, and other platforms are free to offer a similar benefit to game publishers.
In 191, the plaintiff shows that a publisher could set the price on a rival platform at 20% less and make more profit than on Steam. However, there aren’t any examples of enforcement actions where the discount on a rival platform did not exceed a 20% difference. Ultimately, if they don’t have at least that - optimally for a game whose publisher didn’t ever receive free Steam keys - the singular statement of one of their representatives might be the only concrete evidence they have. And at that point, the argument that Tom was just making empty threats has a lot more weight.
Empty threats is an interesting concept, but ultimately the market is behaving as if the threats are sincere so whether or not Valve would follow through is irrelevent to whether the presence of a policy is an exhibition of monopolistic power. The need to see an actual example of a game being delisted for violation of the policy is a weirdly high standard of evidence, when the downstream effects of the policy are otherwise so apparent.
I guess we’ll have to hope the courts are reasonable on this (if it ever gets out of legal limbo lol).
Courts have interpreted the anti-monopoly portion of the Sherman act, which governs antitrust law in the US, to mean that monopoly is only unlawful if the power is used in an unlawful way or if the monopoly was acquired through unlawful means.
As a smoking gun, I don’t think it’s unreasonable to ask for something like that.
If it’s a policy Valve denies and the only evidence of it existing is a single reply in a forum somewhere, then yes, I’m skeptical. And given that there are examples of companies that were willing to break explicit, defensible policies, why aren’t there examples of companies who broke these? Unless the plaintiffs bring in multiple witnesses to testify that this was the policy communicated to them or something along those lines, I can’t see the evidence that they did have this policy being more compelling than the fact that there’s a complete lack of evidence that they ever acted on it.
To be clear, I’m not saying Valve needs to have said that was the reason. But it certainly needs to look like that was the reason. If Valve can’t provide a valid reason for the termination, then that’s very compelling, and even if they can, it’ll come down to which is more believable.
The latter point is a claim in the Wolfire case, and is supposedly a term in the Steam Distribution Agreement which all publishers sign. It’s behind an NDA, though.
There is indirect evidence of this in the following: if Steam’s cut is 30%, and Epic’s is 12%, and a publisher’s own site has no platform fee… Why don’t we see gradiated pricing across these different services?
It seems like there must be some policy or threat of consequences that keeps a game’s price consistent.
I’m open to the idea steam puts restrictions on publishers. But the obvious answer would be that the publisher is taking the extra profit for themselves instead
They certainly do pocket the difference. But the point is the behavior we see is that what we would see if Steam wasn’t enforcing uniform pricing. Publishers would pick some list price on other platforms / their own sites that undercuts Steam and also gives higher margin for themselves.
E.g. a $60 game on Steam with a 30% cut nets you ~$42. If you list the game on for $50 on Epic with a 12% cut, you net $44. The price differential works in favor of the consumer and publisher, and would convince more people to buy on the high-margin platform. A greedy publisher isn’t going to keep the $60 price tag, because that just pushes consumers to buy on Steam (which has the most features).