Lawsuit accuses Valve of abusing Steam market power to prevent price competition Eurogamer.net If you click on a link and make a purchase we may receive a small commission. Read our editorial policy. Lawsuit accuses Valve of abusing Steam market power to prevent price competition Rust in peace. News by Wesley Yin-Poole Deputy Editorial Director Updated on 30 Jan 2021 79 comments A new lawsuit has accused Valve of abusing Steam's market power to prevent price competition. The Hollywood Reporter said that five gamers filed an antitrust class action in California that alleges Valve requires developers and publishers enter into a "Most Favoured Nation" clause. Watch on YouTube Eurogamer Next-Gen News Cast - Should Sony issue refunds for Control on PS5? A Most Favoured Nation clause is a retail parity clause in which a supplier agrees to treat a particular customer no worse than all other customers. MFNs are under increased scrutiny from authorities across the world, including the European Commission. The lawsuit alleges a developer or publisher must agree the price of a PC game on Steam will be the same price as on other PC platforms. Essentially, the lawsuit claims Steam does not allow developers to price their games lower on other platforms. The suit, submitted by American law firm Vorys, Sater, Seymour and Pease LLP, says Valve's MFN clause keeps prices of PC games high on other platforms, such as the Epic Games Store and the Microsoft Store. "The Steam MFN also hinders innovation by creating an artificial barrier to entry for platforms," reads the complaint. "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." The lawsuit uses tweets from Epic boss Tim Sweeney to back up its case. In a January 2019 tweet, Sweeney said Steam "has veto power over prices". 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- Tim Sweeney (@TimSweeneyEpic) January 30, 2019 To see this content please enable targeting cookies. Manage cookie settings Then, in a February tweet, Sweeney added: "If the dominant store has a price parity clause, and takes a much higher revenue share than competitors, then the only way for creators to pass savings on to gamers is by avoiding the dominant store. "That's what this is ultimately about!" Curiously, the lawsuit includes a raft of publishers as co-defendants: CD Projekt, Ubisoft, kChamp Games (the one-man indie developer behind ShellShock Live), Rust, LLC (the Los Angeles developer behind Hot Dogs, Horseshoes & Hand Grenades), and Devolver Digital. The lawsuit alleges these companies agreed to the Steam MFN. But why include only these publishers and developers and not the many others who release games on Steam? Why single out two indie developers in this case? The suit alleges that if Steam MFN did not exist and platforms were able to compete on price, then platforms competing with Steam would be able to provide the same (or higher) margins to game developers while simultaneously providing lower prices to consumers. But does this play out in reality? Ubisoft ditched Steam a while back to launch its PC games on the Epic Games Store. On Epic's platform, Assassin's Creed Valhalla costs £49.99. That's the same price as Assassin's Creed Odyssey costs on Steam. Despite the increased revenue share afforded to publishers and developers on the Epic Games Store and the fact Assassin's Creed Valhalla is not on Steam, it doesn't look like any saving has been passed on to customers. And what about this Steam MVN upon which the lawsuit is based? According to the pricing section of Steamworks' documentation, developers and publishers are responsible for setting and managing pricing for their products. However, the blurb confirms Valve will review initial pricing and proposed pricing adjustments (sales). "Initial pricing as well as proposed pricing adjustments will be reviewed by Valve and are usually processed within one or two business days," reads the documentation. "We recommend pricing strategies based on our experience and we may suggest prices based on currency conversions and other factors." Steam's pricing rules, according to public documentation. Does this amount to an MVN clause? Tim Sweeney seems to think so. In a February 2019 tweet, the Epic boss said the "reviewed by Valve" line "shows developers don't have autonomy to set prices for games". There is a clearer stipulation in the Steam keys section of the Steamworks documentation that reveals Valve expects price parity on Steam keys, specifically: "Please note that Steam keys cannot be sold on other sites unless the product is also available for purchase on Steam at no higher a price than is offered on any other service or website." What's going on here, then? Back in February 2019, Epic's Tim Sweeney tweeted to suggest private agreements between Steam and developers is not usually known. "The situation with price parity expectations on Steam is not transparent," Sweeney said. "Valve's public docs say temporary sales elsewhere are fine but they expect overall price parity on Steam keys. What each private Steam agreement with developers require is not generally know." Then, later from Sweeney on Twitter: "We have been told by multiple developers that Valve has approval over price and that long-term price parity (excluding temporary sales) is expected. We are researching further. Because these agreements are private, any Valve clarification would be helpful." Valve is yet to comment on the lawsuit. Devolver has shrugged it off. We started Rust Inc. to quietly steal Rust away from you.- Devolver Digital (@devolverdigital) January 29, 2021 To see this content please enable targeting cookies. Manage cookie settings The lawsuit wants a ruling that Steam's supposed MFN clause "is anticompetitive and constitutes illegal monopolisation and monopoly maintenance", an injunction, damages and legal costs. Become a Eurogamer subscriber and get your first month for £1 Get your first month for £1 (normally £3.99) when you buy a Standard Eurogamer subscription. Enjoy ad-free browsing, merch discounts, our monthly letter from the editor, and show your support with a supporter-exclusive comment flair! Support us View supporter archive More News Google announces cloud gaming Chromebooks less than a fortnight after Stadia shutdown GeForce Now preinstalled. 4 Atari will hold RollerCoaster Tycoon rights for another decade Ups and downs. 7 Lady Dimitrescu will be a tad smaller in Resident Evil Village's Mercenaries DLC Level the playing field. 1 Overwatch 2 suffers another DDoS attack and character roster bugs Mei Mei. 13 Latest Articles Digital Foundry Nvidia GeForce RTX 4090: a new level in graphics performance The Digital Foundry video review - and how the new GPU champion delivers for 4K 120fps gaming. Feature Evercore Heroes wants to wind people up the right way "There's less rage at them, because they didn't end your fun." Google announces cloud gaming Chromebooks less than a fortnight after Stadia shutdown GeForce Now preinstalled. 4 Genshin Impact Path of Gleaming Jade dates, login event rewards Including other anniversary rewards and how to claim them. Supporters Only Premium only Off Topic: Take a minute to appreciate Cookin' with Coolio's incredible scallops recipe. What a great book. Premium only Off Topic: Reading City of Glass in comic form "Where exactly am I going?" Premium only Off Topic: Il Buco is a transporting film about a really big hole Underlands. Off-Topic Netflix handled Sandman brilliantly It was Dreamy. 9 Buy things with globes on them And other lovely Eurogamer merch in our official store! Explore our store