Valve Corporation, the developer behind Steam, is currently embroiled in allegations of defrauding 14 million users in the UK. Discover the details of the claim, its originators, and explore past legal battles that Valve has encountered.
Steam's Market Influence Under Scrutiny
Allegations of Anti-Competitive Practices in the U.K.
Vicki Shotbolt, a prominent advocate for children’s digital rights, has initiated a $841 million (£656 million) collective action lawsuit against Valve Corporation, filed through Vicki Shotbolt Class Representative Limited. The claim, submitted to the Competition Appeal Tribunal on June 5 2024, contends that Valve, which owns the leading digital PC game distribution platform Steam, has been overcharging 14 million UK gamers by stifling competition and enforcing restrictive pricing policies on game publishers.
The lawsuit alleges that Valve's pricing restrictions prevent game publishers from offering lower prices on other platforms, thereby forcing consumers to pay more for PC games and additional content. This practice, according to Shotbolt, has enabled Valve to maintain a hefty commission of up to 30% on sales. The claim accuses Valve of exploiting its dominant market position to unfairly eliminate competition, in violation of UK competition laws designed to prevent such anti-competitive behavior.
Valve's Dominance in the Gaming Market
In VG Insight’s Market Report, Valve's Steam platform had a huge year in 2023, making over $9 billion in revenue. This was because a lot of people bought games on Steam, around 580 million games, to be exact, and there were 14,000 new games released. However, despite all these sales, most of the money came from just a handful of games. In fact, the top 10 best-selling games made up 61% of all sales, and the top 100 games made up 91%. This shows that while there are thousands of games available on Steam, only a small number of them are really popular and making most of the money.
Now, why is this important in the context of the allegations against Valve? Well, it's all about competition. When one company, like Valve, has so much control over what games people buy and play, it can make it really hard for other companies to compete. If Valve is unfairly using its power to make it difficult for other game developers or platforms to succeed, it could mean less choice and higher prices for gamers. So, when people accuse Valve of anti-competitive behavior, they're worried that it's not just hurting other companies, but also the players themselves, who might end up with fewer options and paying more for games.
Milberg London LLP Backs the Claim
Supported by Milberg London LLP, a law firm known for its involvement in multi-party cases in the UK, this claim is part of a broader effort to hold major tech companies accountable for their actions. Previous cases brought by the firm against companies like Facebook, Google, and Sony reflect a commitment to ensuring fair competition and market practices. According to BBC, Natasha Pearman, a partner at Milberg, highlighted the role of competition law in protecting consumers' interests. If successful, this lawsuit could result in UK consumers who purchased PC games or add-on content from 5 June 2018 receiving compensation of up to $47.54 (£44), with potentially higher amounts for residents of Scotland.
Valve's Antitrust Suit in the U.S.
This isn't the first time Valve has faced legal challenges. In an antitrust lawsuit filed by Wolfire Games, Valve CEO Gabe Newell was ordered to attend an in-person deposition. According to a court order filed on November 16, 2023, in the US District Court for the Western District of Washington, Wolfire Games claims that Newell is essential for providing insights into Valve's business strategy and that an in-person deposition is crucial for evaluating his credibility.
Wolfire Games initially filed the antitrust lawsuit in April 2021, alleging that Valve engaged in anti-competitive practices on its Steam platform. The complaint focused on the 30% commission that Valve takes from nearly every sale on Steam. Wolfire argued that Valve leveraged its market dominance to impose an excessively high cut from sales, thereby exploiting both publishers and consumers.
The initial complaint was dismissed in November 2021 by a US District judge, who ruled that the allegations did not sufficiently establish an antitrust injury. The judge allowed Wolfire Games to file an amended complaint, which they did in May 2022.
No further information regarding the status of this lawsuit is available, so it is unclear whether the case is still ongoing, has been settled, or if a judgment has been made in favor of either party. This case, along with the recent collective action claim filed by Vicki Shotbolt in the UK, highlights the increasing legal accusations Valve faces over its business practices and market influence.
Source:
Vicki Shotbolt Class Representative Limited Claims
BBC Article
VG Insights Market Report
Valve Ordered to Testify
