A district judge in the United States declared that Valve will face an antitrust lawsuit for taking advantage of its dominant position in the PC gaming market. In accordance with BloombergJudge John C. Coughenour determined that the company would have incurred in possible illicit conduct with the Steam store.
The allegation stems from a lawsuit filed by Wolfire Games, an independent developer, that sued Valve in April 2021 for anti-competitive practices. According to Wolfire, Steam takes advantage of market dominance to get an extraordinarily high percentage of all sales that go through your store: 30%.
The percentage mentioned by the developer is the center of contention in multiple lawsuits, including accusations against Apple and Google for commissions in their application stores. In the case of Steam, Wolfire assured that it not only exploits publishers and consumers, but also prevents other stores from competing with it.
Although the initial lawsuit was dismissed in November 2021 at the request of Valve, Wolfire filed a new claim. Judge Coughenour found that the most favored nation clause (MFNC) used in Steam has increased the prices of video games.
The company “allegedly enforces this regime through a combination of written and unwritten rules” that imposes its own conditions on how even non-Steam-enabled games are sold and listed.
The most favored nation policy It is a clause where one party promises the other to offer the best price or purchase conditions. Although the intention is to favor the consumer, this clause benefits dominant companies as price competition decreases.
Valve applies a price policy that prevents competition
Wolfire Games claims that Valve uses its Price Parity Provision policy to control sales on other platforms. To the require publishers not to sell cheaper in other stores, prevents competitors from emerging. This forces independent developers and publishers to continue using the online store.
Valve also reserves the right to deny keys or revoke key request privileges if they “harm Steam customers”. The company would use a double standard, since in its crusade to “protect its users”, would prevent them from benefiting from cheaper games.
The most-favored-nation policy was enough for Judge John C. Coughenour to allow the case to move forward in Washington’s Western District Court. Despite Valve’s allegations, Coughenour denied that the Steam store and the gaming platform operate separately.
In 2019, the European Commission accused Valve and five other companies of using regional lockdowns to restrict purchases of video games. Locking in activation keys is against the antitrust rules of the European Union. Faced with the accusation, Valve declared that by removing the block, partners would increase their prices in less prosperous countries, affecting consumers.