Tuesday, May 11, 2021

New lawsuit accuses Valve of abusing power to keep PC game prices high

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A new lawsuit filed by five players in a California federal court accuses Valve of abusing its power to keep PC game prices high. THR, this lawsuit claims that Valve does not maintain its dominance in the PC market by offering better prices on Steam than other platforms, but does so by abusing its power to force developers into what one calls for a “ most favored nations ” clause.

“Valve Corporation’s Steam platform is the dominant platform for game developers to distribute and sell PC games in the United States,” says the complaint being handled by lawyers for Vorys, Sater, Seymour and Pease. “But the Steam platform doesn’t maintain its dominance through better pricing than competing platforms. Instead, Valve is abusing the market power of the Steam platform by demanding that game developers conclude a “ most favored nations ” provision contained in the Steam distribution agreement whereby the game developers agree that the price of a PC game on the Steam platform will be the same price as the developers of games sell their PC games on other platforms. “

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The lawsuit also alleges that because Valve is forcing developers to enter this “most favored nations” clause, it “hinders innovation by creating an artificial barrier to entry for platforms” and keeps prices high on d other digital storefronts like the Epic Games Store and Microsoft Boutique.

“The Steam MFN also hinders innovation by creating an artificial barrier to entry for platforms,” the complaint adds. “When a market like this is highly concentrated, a new entrant can benefit consumers by undercutting the incumbent’s prices. The ability to provide PC games to consumers at lower prices is one way for a business or new entrant to gain market share. If this market worked well, i.e. if the Steam NPF did not exist and the platforms could compete on price, Steam’s competing platforms would be able to provide the same margins (or more) to game developers while offering consumers lower prices. “

CD Projekt SA, CD Projekt, Inc., Ubisoft Entertainment SA, Ubisoft, Inc., Ubisoft LA, Inc., kChamp Games, Inc., Rust, LLC and Devolver Digital, Inc. are also included as defendants in the lawsuit , with plaintiffs accusing these companies of agreeing with the Steam platform for the Steam MFN.This new class action follows Valve, Capcom, Bandai Namco, Focus Home, Koch Media, ZeniMax fined $ 9.4 million by the European Commission on the practice of “geo-blocking”.

Any advice to give us? Want to discuss a possible story? Please send an email to newstips@ign.com.

Adam Bankhurst is a news editor for IGN. You can follow him on Twitter @AdamBankhurst and on Tic.



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