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Valve are in the legal spotlight again following the EU Commission Fine with a few more Steam troubles, as a new lawsuit has emerged with a claim about an "abuse" of their market power.

First picked up by the Hollywood Reporter, which has the full document showing the lawsuit was filed on January 28, was filed by 5 people together and doesn't appear to have any major companies backing it. The suit mentions how Valve require developers to sign an agreement that contains a "Most Favored Nations" provision to have developers keep the price of their games the same on Steam as other platforms. To be clear, they're talking about the Steam Distribution Agreement which isn't public and not what we can all see in the Steamworks documentation which talks about keys.

This means (if the claim is actually true) that developers cannot have their game on itch, GOG, Humble or anywhere else at a lower price, and so the lawsuit claims that other platforms are unable to compete on pricing "thereby insulating the Steam platform from competition" and that it "acts as an artificial barrier to entry by potential rival platforms and as higher prices lead to less sales of PC Games".

As part of the lawsuit it also names CD Projekt, Ubisoft, Devolver Digital and others.

It argues that if developers could legitimately set their own prices across different stores, they could lower their prices on stores that take a lower cut and "generate the same or even greater revenue per game as a result of the lower commissions, while lowering prices to consumers". They even directly bring up posts on Twitter from the Epic Games CEO, Tim Sweeney, like this one from 2019:

Steam has veto power over prices, so if a multi-store developer wishes to sell their game for a lower price on the Epic Games store than Steam, then: 1) Valve can simply say “no” 2) Pricing disparity would likely anger Steam users, leading to review bombing, etc

What are your thoughts on this? Should Valve be forced to allow developers to set their own prices, and not require their price to be the same as other stores?

Article taken from GamingOnLinux.com.
Tags: Misc, Steam, Valve
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Eike 30 Mar
Quoting: tuubi
Quoting: Merriam-WebsterAnti-competitive: 'tending to reduce or discourage competition'
Anti-consumer: 'not favorable to consumers : improperly favoring the interests of businesses over the interests of consumers'

I think he used the term correctly, and you might be mixing up the two terms.

I agree. Of course, anti-competitive behaviour may be bad for the consumer as well sooner or later, but that's not what's defining the term.
Quoting: Grazen
Quoting: Purple Library GuyHuh. Well, I guess if the allegation is true, that Valve's secret contracts involve making developers not sell their games cheaper anywhere else as a condition of being able to sell on Steam, that's kind of anti-competitive in that it stops other stores from trying to gain market share by underselling Steam. And if you foreclose on the whole concept of competition on price, that's likely to be bad for consumers.

Given the high hurdles in US antitrust law, even if the allegation is true that might well not be enough for Valve to actually lose the lawsuit, as noted by EagleDelta etc. But it's still a practice I'd find somewhat annoying--sure, you can understand why they'd want to do it, but then it's easy to understand why any company would do any anti-competitive practice . . . no company wants to be successfully competed against.

Of course if it ain't true then the filers are just assholes. And whether it's true or not, the filers could have questionable motivations and backing.

Anti-competitive means there needs to be harm to consumers (that's a brief legal description) not to competitors. Steam requiring that you keep prices LOWER so that their customers can benefit from LOWER PRICES on other platforms is a plus for consumers. I know it's a plus for me. It means that when I see a sale for a game on another platform, I can go to my platform of choice to get the same price. I win. That's a good thing.
I think you're mistaken on two levels here. First, on what "anti-competitive" is. Lots of tactics are anti-competitive without being anti-consumer. So for instance, if there are four airlines, one of them has more money than the other three, and so the one starts offering airline tickets at below cost in hopes that it will drive the others out of business before it runs out of money itself, that tactic gives consumers cheap airline tickets, at least in the short term. But it is certainly anti-competitive; it's an attempt to establish a monopoly. It also happens that in the long run it's probably not good for consumers, because that one airline did not start the price war just to return to the status quo prices afterwards--the point is that after there's no competition it can jack prices up and reap far more profits than it lost. Once it has the monopoly, jacking the prices up will not be anti-competitive (there already is no competition), but it will sure as hell be anti-consumer.

Second, on what this policy (if it exists) does. The arrow of causation goes in the opposite direction to what you're saying. It does not mean Steam has to match other platforms' sales (actually, it doesn't seem as if it's alleging that sale prices are involved at all, only the regular price or prices which are "on sale" for so long they are in effect the regular price). If it included sales in the first place, what it would mean is that no other platform could mount a sale unless Steam was doing it first.
More generally, Steam is the big player, the main marketplace. And, it charges a large cut, 30%. If a game publisher wants to make $14 per game, it must charge $20 on Steam. But on Itch.io, say, it could make $14 per game while charging $16, or even less if the publisher wanted to be a jerk to Itch. So normally, platforms that took a smaller cut than Valve does could undersell Steam and potentially gain market share via their lower prices, potentially forcing Steam to in turn lower its cut to compete, lowering game prices across the board.
The kind of agreement alleged would mean the publisher must instead charge at least $20 on Itch and other such platforms. At the immediate level that means you can never get a price break on another platform. I don't see any way in which it reduces prices to consumers, quite the reverse, even in the short term. In the longer term, by making competition on price impossible, it reduces pressure for Valve to reduce their cut, so that would keep prices higher in the longer term.

So yeah, I don't see where you get the idea that such agreements would lower game prices in any way shape or form.
Grazen 13 Apr
Quoting: Purple Library Guy
Quoting: Grazen
Quoting: Purple Library GuyHuh. Well, I guess if the allegation is true, that Valve's secret contracts involve making developers not sell their games cheaper anywhere else as a condition of being able to sell on Steam, that's kind of anti-competitive in that it stops other stores from trying to gain market share by underselling Steam. And if you foreclose on the whole concept of competition on price, that's likely to be bad for consumers.

Given the high hurdles in US antitrust law, even if the allegation is true that might well not be enough for Valve to actually lose the lawsuit, as noted by EagleDelta etc. But it's still a practice I'd find somewhat annoying--sure, you can understand why they'd want to do it, but then it's easy to understand why any company would do any anti-competitive practice . . . no company wants to be successfully competed against.

Of course if it ain't true then the filers are just assholes. And whether it's true or not, the filers could have questionable motivations and backing.

Anti-competitive means there needs to be harm to consumers (that's a brief legal description) not to competitors. Steam requiring that you keep prices LOWER so that their customers can benefit from LOWER PRICES on other platforms is a plus for consumers. I know it's a plus for me. It means that when I see a sale for a game on another platform, I can go to my platform of choice to get the same price. I win. That's a good thing.
I think you're mistaken on two levels here. First, on what "anti-competitive" is. Lots of tactics are anti-competitive without being anti-consumer. So for instance, if there are four airlines, one of them has more money than the other three, and so the one starts offering airline tickets at below cost in hopes that it will drive the others out of business before it runs out of money itself, that tactic gives consumers cheap airline tickets, at least in the short term. But it is certainly anti-competitive; it's an attempt to establish a monopoly. It also happens that in the long run it's probably not good for consumers, because that one airline did not start the price war just to return to the status quo prices afterwards--the point is that after there's no competition it can jack prices up and reap far more profits than it lost. Once it has the monopoly, jacking the prices up will not be anti-competitive (there already is no competition), but it will sure as hell be anti-consumer.

Second, on what this policy (if it exists) does. The arrow of causation goes in the opposite direction to what you're saying. It does not mean Steam has to match other platforms' sales (actually, it doesn't seem as if it's alleging that sale prices are involved at all, only the regular price or prices which are "on sale" for so long they are in effect the regular price). If it included sales in the first place, what it would mean is that no other platform could mount a sale unless Steam was doing it first.
More generally, Steam is the big player, the main marketplace. And, it charges a large cut, 30%. If a game publisher wants to make $14 per game, it must charge $20 on Steam. But on Itch.io, say, it could make $14 per game while charging $16, or even less if the publisher wanted to be a jerk to Itch. So normally, platforms that took a smaller cut than Valve does could undersell Steam and potentially gain market share via their lower prices, potentially forcing Steam to in turn lower its cut to compete, lowering game prices across the board.
The kind of agreement alleged would mean the publisher must instead charge at least $20 on Itch and other such platforms. At the immediate level that means you can never get a price break on another platform. I don't see any way in which it reduces prices to consumers, quite the reverse, even in the short term. In the longer term, by making competition on price impossible, it reduces pressure for Valve to reduce their cut, so that would keep prices higher in the longer term.

So yeah, I don't see where you get the idea that such agreements would lower game prices in any way shape or form.

Well, we’ll have to agree to disagree on both points. On your first point, selling below cost, that’s called dumping and that is clearly not what Valve is doing and your example is completely irrelevant.

On your second point, it is (apparently) a term of service for Steam that publishers NOT sell their games for a lower price on a competing platform. They can of course choose not to sell their game on steam (or not to sell it for a while) as many do when they go on the Epic Game Store. In fact many or most publishers sell their games through their own online stores, including EA, Ubisoft and CDPR - cool, they can do that... BUT BUT BUT... if you want the benefit of selling your game on Steam you can’t position it as a higher priced store to make your own store look better in comparison. Can’t have your cake and eat it too... this cake is no lie! Publishers can also choose to sell games exclusively on their own platform like Blizzard or Riot or Epic does... in fact there’s lots of competition... because Valve keeps Steam’s rules simple and expansive.
Quoting: GrazenWell, we’ll have to agree to disagree on both points. On your first point, selling below cost, that’s called dumping and that is clearly not what Valve is doing and your example is completely irrelevant.
Are you for real? You made a claim about what it means for something to be anti-competitive. I refuted that claim. That's what it's relevant to.

And in the second point, you made a claim that these (alleged) license terms of Steam's would cause lower prices. I refuted that claim, and showed how it was in fact the reverse of that. So when you came back to me you sidestepped that whole thing to say that they're just good because Steam is good and letting other stores undersell them would be bad. Maybe, but that's not at all what you were saying before. You are not arguing in good faith.
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