Gaming platform

Valve will face antitrust litigation over Steam gaming platform

Valve will face antitrust litigation over Steam gaming platform

Today, a U.S. District Court in Washington ruled that Valve Corp. would not be able to dismiss the antitrust lawsuit filed against them by Wildfire Games in 2021. Federal Judge John C. Coughenour ruled that it was plausible that Valve was using its dominant position in the PC market. gaming allegedly “to threaten and retaliate against developers who sell games for less through other retailers or platforms”. This business model, the “most favored nation” model, allegedly allows Valve to set its own prices and force others to adopt their business practices, mainly because there is no real alternative to the store. non-Steam PC games owned by Valve. This near-monopoly Valve holds over PC video games, according to Wildfire, has led to an artificial increase in video game prices and market manipulation. Judge Coughenour partially agreed with Wildfire Games and moved the case against Valve forward for more antitrust litigation.

According to Judge Coughenour, Valve “enforced this regime through a combination of written and unwritten rules. [affecting how] games not compatible with Steam are sold and priced. As for why Valve would want to keep or increase video game prices, it comes down to the standard 30% commission on app sales and distribution platforms within the tech industry. Currently, alongside Valve, Apple, Amazon and other big tech companies are also being sued for market manipulation to increase the commissions charged for purchases. Overall, many technology distributors will or are currently facing antitrust litigation over their most-favoured-nation model, centered on artificially raising their prices to increase company commissions.

Although Judge Coughenour asserted that Wildfire Games and other participants in the class action lawsuit against Valve had legitimate claims, not all of the claims were accepted by the federal judge. Along with the most favored nation model, Wildfire Games also claimed that Valve’s ownership of Steam was also an antitrust issue, as Steam was Valve’s primary tool for alleged market manipulation. However, Judge Coughenour disagreed with Wildfire Games’ assertion, stating that there was no alleged consumer demand for “fully functional gaming platforms separate from game stores”. Here, Judge Coughenour makes a valid point, as gamers tend not to vehemently dislike stores operated and owned by gaming platforms, like the PlayStation Store, Xbox Games Store, or Nintendo eShop.