Valve Facing an Antitrust Lawsuit Over 'PC Game Market Dominance'

The Valve Corporation, the publisher of the popular retail platform Steam, is facing a class-action antitrust lawsuit opposing their alleged 'dominance' over PC game distribution.

One of the plaintiffs is Wolfire Games, an indie developer best known for their work on Humble Bundle. Spearheaded by David Rosen, Wolfire CEO, the suit accuses Valve of having an unfair grip on the PC gaming market and distribution through its Steam platform. Supposedly, Valve is using the prevalence of Steam in order to exact a larger toll from its sellers' profits—30%—among other things.

Rosen posted an explanation via the Wolfire Games official blog on May 6.

Valve Facing Antitrust Lawsuit Over 'PC Game Market Dominance'

In layman's terms, the lawsuit is arguing that developers are essentially forced to put their games on Steam if they want any traction in publicity and/or sales. Valve controls a large share of the market—or, of consumer attention—painting Steam as a "must-have" for gaming companies who want their work to be seen.

The case is accusing Valve of having an illegal monopoly on the market—and then using their monopoly power in order to make "unfair" demands of those looking to use their service. For example, the 30% sales fee or the exclusivity Steam all but requires publishers to agree to.

Any funny business, and Steam will supposedly yank the title off the platform—according to Rosen.

"When new video game stores were opening that charged much lower commissions than Valve, I decided that I would provide my game 'Overgrowth' at a lower price to take advantage of the lower commission rates," he wrote, "when I asked Valve about this plan, they replied that they would remove Overgrowth from Steam if I allowed it to be sold at a lower price...even from my own website without Steam keys."

The Steam Keys program is "rigged" in the corporation's favor, Wolfire explains. Valve controls the production of the keys and states that not only are players barred from selling exclusively outside of Steam but that they also need to be selling at Steam's price or higher. Developers aren't allowed to outprice Steam on other retail platforms and even need to check a box agreeing they won't attempt to.

"I believe that Valve is taking away gamers' freedom to choose how much extra they are willing to pay to use their platform," wrote Rosen.

Why Is This Bad?

Without antitrust laws in place, monopolies would take over various sectors of the market, effectively throttling the natural competitive economy and making it impossible for other companies to even get their foot in the door. These monopolies, when left unchecked and unregulated, would then be free to make whatever demands they wanted from their users.

After all, what could the users possibly do? Move to a different, less populated platform—risking their profits and outreach? A noble concept, but rarely successful in practice. Not to mention that those rival upstart platforms often don't survive past their inaugural years. They either die out due to lack of funds or are bought up by the monopoly and consolidated.

This is what the suit is alleging Valve is aiming for: market control and otherwise illicit restrictions.

Rosen explained, "In my opinion, this is part of why all competing stores have failed. This suit insists that Valve stop interfering with pricing on other stores, and allow gamers and developers to make their own decisions."

Valve has yet to issue an official statement regarding the suit at the time of writing.