A recent class action lawsuit has been filed against Valve Software, the company behind the popular online storefront Steam. The lawsuit alleges that Valve is a “platform monopolist” that has kept game prices artificially high and prevented other companies from entering the digital distribution market for PC gaming. The lawsuit claims that Valve’s anticompetitive practices, such as a 30% tax on publishers and a platform most-favored-nations clause, have stifled competition in the market.
Valve operates Steam, which sells digital video games to users on PC, Mac, and Linux. The platform has over 33 million concurrent users worldwide and an estimated 120 million regular users. There are currently over 191,000 games available on Steam. Competitors such as Electronic Arts, Microsoft, Amazon, and Epic have attempted to enter the PC gaming market but have been unable to gain significant traction due to Valve’s practices.
The lawsuit is brought by four individuals who claim to have purchased PC games via Steam at “supracompetitive prices.” The plaintiffs allege that Valve’s practices keep the cost of PC gaming high for consumers by engaging in price fixing and preventing potential competitors from entering the market. Hagens Berman, a Seattle-based law firm representing the plaintiffs, states that Valve has maintained an unlawful monopoly in the PC gaming market by restricting price competition.
Valve’s 30% revenue split with publishers on Steam has been a point of controversy, with some viewing it as a tax on publishers. Competitors such as Epic Games and Microsoft have attempted to challenge Steam’s dominance by offering more favorable revenue splits to developers. However, many companies that initially positioned themselves as competitors to Steam have quietly returned to the platform, contributing to Steam’s continued growth and dominance in the market.
This lawsuit is the latest in a series of antitrust suits filed against Valve Software, with similar allegations of anticompetitive practices. The highest-profile recent suit was filed by Wolfire Games, alleging that Valve threatened to pull their game from Steam if it was sold elsewhere at a lower price. The outcome of the trial is currently ongoing. Valve has not yet responded to requests for comment on the latest lawsuit, but the plaintiffs intend to fight for consumers’ rights against Valve and challenge their alleged monopoly in the PC gaming market.
Despite the challenges from competitors, Steam has maintained its dominance in the PC gaming market, with an estimated 75% to 85% share of revenue. The lawsuit against Valve highlights concerns about anticompetitive practices and the impact on consumers by keeping game prices artificially high. As the legal proceedings unfold, it remains to be seen how Valve will respond and whether any changes will be made to the digital distribution landscape for PC gaming.
