Today, a US District Court in Washington decided that Valve Corp. would not be able to dismiss the antitrust lawsuit filed against them by Wildfire Games in 2021. Federal Judge John C. Coughenour ruled that it is plausible that Valve uses their market dominance in PC gaming allegedly “to threaten and retaliate against developers that sell games for less through other retailers or platforms.” This business model, the “most favored nation” model, allegedly allows Valve to set their own prices and force others to their business practices, mainly because there is no real alternative to PC games store other than Steam, which Valve owns. This quasi-monopoly Valve has on PC video games, Wildfire alleges, has led to an artificial increase in video game prices and market manipulation. Judge Coughenour partially agreed with Wildfire Games and moved the case against Valve forward for more antitrust litigation.
According to Judge Coughenour, Valve allegedly “enforces this regime through a combination of written and unwritten rules [affecting how] non-Steam-enabled games are sold and priced.” As for why Valve would want to maintain or increase video game prices, it boils down to the standard 30% commission across sales and app distribution platforms within the technology industry. As of right now, alongside Valve, Apple, Amazon, and other large tech companies are also being sued for market manipulation in order to increase the commissions received for purchases. Overall, a lot of technology distributors will be or are currently facing antitrust litigation over their most favored nation model, centered around artificially increasing their prices to increase the company’s commissions.
While Judge Coughenour asserted that Wildfire Games, and other participants in the class-action lawsuit against Valve, had legitimate claims, not all claims were accepted by the federal judge. Alongside the most favored nation model, Wildfire Games also claimed Valve owning Steam was also an antitrust matter because Steam was Valve’s main tool for the alleged market manipulation. However, Judge Coughenour disagreed with Wildfire Games’ claim, stating that there is no alleged consumer demand for “fully functional gaming platforms distinct from game stores.” Here, Judge Coughenour makes a valid point as gamers tend to not vehemently dislike stores operated and owned by gaming platforms, like the PlayStation Store, Xbox Games Store, or Nintendo eShop.