It’s all under scrutiny.
On Thursday, 5 gamers filed a class action lawsuit in California federal court. The target of the suit? Valve’s PC game distribution platform, Steam.
Part of the compliant put out by the plaintiff’s legal consul at Vorys Sater:
Valve Corporation’s Steam platform is the dominant platform for game developers to distribute and sell PC games in the United States. But the Steam platform does not maintain its dominance through better pricing than by rival platforms. Instead, Valve abuses the Steam platform’s market power by requiring game developers to enter into 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 the game developers sell their PC games on other platforms.
This isn’t the first time an MFN (“Most Favored Nation”) clause has come under the microscope. The Department of Justice held a workshop last year on the topic, for one. The charge is that such a clause makes the distribution market harder to enter for potential competitors, as well as keeps prices high across platforms which should normally provide options for the consumer. The complaint continues:
The Steam MFN also hinders innovation by creating an artificial barrier to entry for platforms. When a market, such as this one, 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 a firm or new entrant could gain market share. If this market functioned properly—that is, if the Steam MFN did not exist and platforms were able to compete on price—platforms competing with Steam would be able to provide the same (or higher) margins to game developers while simultaneously providing lower prices to consumers.
Valve has not officially commented on the suit. Nonetheless, this can be bad for Valve; their practices are going to be examined by the court, which will determine whether they’re predatory or the agreements are unreasonable. This comes on the heels of the E.U. leveraging fines on Valve for their “geo blocking” practices.
The full complaint:
Source: The Hollywood Reporter
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