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Valve faces antitrust case over Steam's 'most favored nation' pricing

A U.S. Judge ruled that it's plausible that Valve has artificially driven up the price of games through market dominance, exploitation, and retaliatory measures.

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Steam continues to be one of the most dominant storefronts and platforms in all of PC gaming, but a recent ruling from a Seattle judge may have parent company Valve facing antitrust litigation over the way it runs its gaming empire on Steam. The recent ruling alleges that Steam’s “most favored nation” pricing and management has driven up the cost of games and exploited the market in various ways.

The ruling came down from Seattle federal Judge John C. Coughenour, who is letting the case move forward in the U.S. District Court for the Western District of Washington, as reported by Bloomberg Law. According to Judge Coughenour’s ruling, the complaints that Valve exploits its dominance in the PC space to threaten developers that attempt to sell games through other storefronts and launchers for less may indeed constitute antitrust legal action against the company.

“[Valve] allegedly enforces this regime through a combination of written and unwritten rules [on how even] non-Steam-enabled games are sold and priced,” Coughenour wrote. “These allegations are sufficient to plausibly allege unlawful conduct.”

Seattle federal Judge Coughenour says the change in the market where Steam now competes almost entirely against other digital retailors makes its
Seattle federal Judge Coughenour says the change in the market where Steam now competes almost entirely against other digital retailors makes its "most favored nation" pricing policies a plausible topic of anticompetitive legal action.

Valve has been a nearly undisputable dominant force in the PC games space for sales and platform over the course of the last couple decades through Steam. During this time, Steam has faced numerous problems of curation, as well as issues with auto-moderation of games. The only groups that have even come close to competing are GOG and Epic Games Store, but Steam has still remained the leading force by far.

Where the case against Steam’s alleged anti-consumer and anti-developer practices was dismissed, Judge Coughenour claimed a changing of times and the state of the market made Steam’s most-favored-nation pricing policies more of an issue.

“[Valve] did not need market power to charge a fee well above its cost structure because those brick-and-mortar competitors had a far higher cost structure,” Judge Coughenour said of the difference between Valve competing against physical locations and the digital market as it mostly is nowadays.

With this ruling, Valve seems to be in for a major legal battle. Stay tuned as we continue to follow for further updates on the case.

Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.

From The Chatty
  • reply
    May 11, 2022 6:47 AM

    TJ Denzer posted a new article, Valve faces antitrust case over Steam's 'most favored nation' pricing

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      May 11, 2022 10:10 AM

      The whole thing is pretty sketchy. Hard to find concrete info about what their actual rules are as well.

      I've seen people say this pertains to the same games being sold on other platforms (Microsoft, EGS, GOG, etc) that are obviously separate from the Steam game, and others say their terms only apply to Steam games that have their Steam keys being sold elsewhere, and even then it's not a hard and fast rule, but they do try to dissuade it and will take action if they deem it to be unfair.

      How has GMG gotten away with selling keys at cheaper than Steam prices for so long? Is their loophole that they buy those keys at x prices and can resell them for any price they want without ramification? Or are the Steam terms only relevant to MSRPs? So can any publisher and developer or store selling a game on another platform, discount those games to whatever they like, whenever they like?

      The Steam store itself gained so much traction by selling games far below their MSRPs in big sales events. So they really shouldn't be able to punish anyone else for selling something cheaper elsewhere like that. If that is part of the official terms, I do hope they lose this one.

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      May 11, 2022 10:18 AM

      What is the argument that “most favored nation” pricing is not anti competitive? Signing a “Don’t sell your product for less anywhere” deal is a pretty strong signal of a distorted market. The only reason for a seller to agree to those terms is because a particular market is so critical to their sales that they have no choice but to agree to nearly any terms to be on it or else their business cannot succeed.

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        May 11, 2022 10:27 AM

        yeah, I don't get how that is allowed.

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        May 11, 2022 2:34 PM

        i suspect it totally isn't allowed, and they just haven't been actually challenged on it until now haha

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      May 11, 2022 10:20 AM

      (and for Steam sales, I do understand it is publishers and / or developers setting the price drops for those, not Valve, though they definitely seemed encourage or at least facilitated and promoted deep discounts that were well below the prices of the same games on other stores and platforms).

    • reply
      May 11, 2022 5:22 PM

      Good

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