Steam Monopoly Lawsuit Attorney

U.S. District Court Judge John C. Coughenour ruled that Valve Corporation, the publisher of Steam, a PC gaming platform and digital sales store, should face antitrust litigation. Coughenour handed down the decision on May 6. He offered his opinion on the matter, saying Valve is in a favorable position in the market and can use its dominance to intimidate or exploit customers and developers.

The ruling included information about the company’s alleged actions. The judge wrote that Valve allegedly engages in unlawful conduct by enforcing unwritten and written rules regarding game pricing and sales. The company imposes conditions on how publishers and other market participants can price and sell even non-Steam-enabled games.

About Valve and Steam

Valve is the premier gaming platform in the United States and the world. Valve began as a video game development company but shifted its business when it created the Steam platform. Steam was meant to focus on patching and updating bugs in games. Over time, Steam shifted its business from a patching and version control service by adding an online store where games could be purchased. Any game purchased through Steam couldn’t be played unless the user had or created an account with the Steam platform.

Steam eventually acquired a blockbuster hit from another multi-player service that was forced to shut down. When Steam acquired that game and required its users to open Steam accounts to play it, they were able to force their gaming platform on a greater portion of the market. There are at least 50,000 games on Steam, and most of them are third-party creations.

Wolfire Games Founder Seeks Legal Action

David Rosen, the founder of Wolfire Games, claimed he had no choice but to pursue a lawsuit against Valve. He alleged the Steam creator company interfered with other storefronts’ pricing and took inordinate cuts of revenue from other developers. Rosen decided to file an antitrust lawsuit accusing the company of using Steam to create a monopoly on the distribution of PC games.

Rosen also expanded on his allegations, claiming his company personally experienced the misconduct outlined in the complaint. New video game stores that charged lower commissions than Valve prompted his decision to provide his game Overgrowth at a lower price. He wanted to take advantage of the lower commission rates. He also intended to blog about the results of his decision.

However, after discussing his plan with Steam, the company responded with threats of removing Overgrowth from Steam if Wolfire Games sold the game at a lower price anywhere else, including on its own website, without using Steam’s DRM and keys. Steam keys enable the user to access a game on the Steam platform, and can be sold by other platforms.

Rosen also brought accusations against Valve, claiming the company threatened other developers that charged lower prices on competing storefronts. The threats involved removing titles from Steam if the developers didn’t increase pricing. According to Rosen, determining whether Steam or any other game developer earns a commission is impossible.

Did Valve Corp. Violate Antitrust Law?

Antitrust laws exist on the federal level, and some states have their own antitrust laws. In the United States, the primary federal antitrust law is the Sherman Antitrust Act of 1890. This law prohibits any agreement that restrains trade, including monopolization and attempts to monopolize, price fixing, and other anti-competitive practices.

Rosen contacted a legal expert after his own experience with Valve and learning about other developers’ experiences. He wanted to know if the company followed antitrust law.

That is when he decided to file a lawsuit. He thinks most developers fear losing most of their revenue if they don’t sell on Valve’s digital store since a majority of their sales come from that platform. Game development is already risky, and avoiding Steam altogether would add unnecessary additional risk. That is why many developers don’t have much choice other than to sell their products on Steam and follow Valve’s orders.

Efforts to Make the Lawsuit Go Away

After Rosen filed his lawsuit, Valve fought back by filing a motion to dismiss. In the motion, Valve claims the lawsuit only has one factual allegation. That involves Valve allegedly informing one unnamed developer not to provide a non-Steam-enabled game for free on Discord’s competing platform if it charges $5 to use the Steam-enabled version of the game on the Steam platform.

However, the evidence does not support Rosen’s allegations of other developers receiving threats of their games getting pulled from the platform. He explained how Wolfire experienced those threats, but he only believed others experienced the same threats. He didn’t provide anecdotes or evidence to back up those claims.

Valve also mentions its rights to price match a game’s Steam listing with Steam Keys sold on other platforms. It directly negates the language in Rosen’s complaint, alleging that under antitrust law, Valve doesn’t have a duty to allow developers to undersell prices for games sold on Steam using free Steam Keys.

The rest of the motion explained why Steam justifies taking a 30 percent cut of sales, considering its position in the PC video game business.

Court Ruling on Steam Lawsuits

At first, District Judge Coughenour preliminarily ruled in favor of Valve’s motion to dismiss. He partly dismissed the case. He also requested arbitration for all consumer claims.

However, Coughenour allowed Wolfire to file another lawsuit regarding issues he mentioned in his dismissal order. As a result, Rosen decided to proceed with another claim, arguing that Steam operates as a store and gaming platform in two separate markets. He believes Valve should not be allowed to combine the two.

The judge disagreed. He said consumer demand for a fully functional gaming platform separate from a digital store does not exist. He dismissed that claim but allowed the rest of the lawsuit focusing on Valve’s alleged control of sales and pricing, to proceed in the district court.

Let Attorney Tom Help You Fight for Justice

If you suffered losses due to Valve’s alleged illegal monopoly in the PC gaming marketplace, do not hesitate to call the antitrust lawsuit attorneys of Attorney Tom at (713) 244-6363 for a confidential consultation. We will fight to try to achieve a favorable outcome. You can count on our legal team to protect your rights and aggressively pursue the compensation you deserve.