“Valve Corporation’s Steam platform is the dominant platform for game developers to distribute and sell PC games in the United States[,]” says the first line of the complaint for this class action. But what enables it to keep that dominant position? The complaint alleges that it’s not better pricing or other fair means, but anticompetitive behavior, in violation of the Sherman Act.
This case concerns PC games, which are played on computers, rather than on video game consoles or mobile devices. Platforms are the go-between that facilitate the transactions between developers and users of games. Users pay the platform to buy games, and the platform takes a commission and passes the rest of the payment on to the developer.
The complaint alleges, “Valve abuses the Steam platform’s market power by, upon information and belief, requiring game developers to agree to give Valve either an explicit ‘Most Favored Nations’ (MFN) provision, or forcing game developers to agree to what is in effect a ‘Most Favored Nations’ provision via Valve’s anticompetitive conduct.”
As part of this MFN agreement, developers agree that they will set the price of their games on the Steam platform at the same price as the games are sold for on other platforms.
The complaint alleges, “The MFN and Valve’s conduct have 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.” The complaint claims this also “hinders innovation and suppresses output, as they act as an artificial barrier to entry by potential rival platforms and as higher prices lead to [fewer] sales of PC Games.”
The need to stay mostly at home during the pandemic has given a big boost to game sales. The complaint quotes Valve as saying, “While Steam was already seeing significant growth in 2020 before Covid-19 lockdowns, video game playtime surged when people started staying home, dramatically increasing the number of customers buying and playing games…”
The result has been new highs in monthly and daily active users, peak concurrent users, first-time purchasers, hours of playing time, and number of games purchased.
Two classes and two subclasses have been defined for this action.
- Class I, for damages, is all persons who bought PC games in the US and its territories, at any time, from April 8, 2021 on.
- Class II, for injunctive and declaratory relief, is all persons currently buying PC games in the US and its territories, at any time from April 8, 2021 on.
- Parent Purchaser Subclasses have been defined for both Class I and Class II.
Topic: Antitrust
Most Recent Case Event
Valve Corp. Steam Platform Games Anticompetitive Actions Class Action
April 8, 2021
“Valve Corporation’s Steam platform is the dominant platform for game developers to distribute and sell PC games in the United States[,]” says the first line of the complaint for this class action. But what enables it to keep that dominant position? The complaint alleges that it’s not better pricing or other fair means, but anticompetitive behavior, in violation of the Sherman Act.
Valve Corp. Steam Platform Games Anticompetitive Actions Class ActionCase Event History
Valve Corp. Steam Platform Games Anticompetitive Actions Class Action
April 8, 2021
“Valve Corporation’s Steam platform is the dominant platform for game developers to distribute and sell PC games in the United States[,]” says the first line of the complaint for this class action. But what enables it to keep that dominant position? The complaint alleges that it’s not better pricing or other fair means, but anticompetitive behavior, in violation of the Sherman Act.
Valve Corp. Steam Platform Games Anticompetitive Actions Class Action