Valve antitrust lawsuit leads to questions about Steam's unwritten rules

A couple of weeks ago, Overgrowth developer Wolfire Games filed an antitrust lawsuit against Valve, alleging that it uses Steam's dominant position in the digital gaming marketplace to extract "an extraordinarily high cut from nearly every sale that passes through its store." In a blog post that went up last week, Wolfire founder David Rosen explained his rationale for the suit. 

One of the central complaints in Rosen's lawsuit is that Valve prevents other storefronts from competing on price by making developers promise not to sell their Steam games at a lower price on other stores. Rosen said he ran into that issue when he decided to release Overgrowth at a lower price on other storefronts in order to take advantage of their lower commission rates.

"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 anywhere, even from my own website without Steam keys and without Steam’s DRM," Rosen wrote. 

"While talking to other developers about problems that they were having with Steam, they kept referring to it as a 'monopoly,' and saying that there was nothing that we could do. I wondered, has anyone actually checked if Valve is obeying antitrust law? So I consulted with legal experts, which eventually culminated in the complaint."

Rosen said most developers will earn the bulk of their PC game sales through Steam, but added that the inability to experiment with lower prices on other stores makes it impossible to determine whether Steam's higher rate of commission—30%, compared to 12% on Epic and Microsoft—is actually justified.

"I believe that Valve is taking away gamers' freedom to choose how much extra they are willing to pay to use their platform. I believe they are taking away competing stores' freedom to compete by taking advantage of their lower commission rates. I believe they are taking away developers' freedom to use different pricing models," he wrote.

"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."

In response to the blog post, former Valve writer Chet Faliszek, whose credits include Half-Life 2: Episode One and 2, Left 4 Dead, and Portal, challenged Rosen's assertion. He says that Valve doesn't actually stop developers from pricing their games lower on other platforms.

"His blog post reads like something you see posted on his forum based on something he heard his older brother talking about. His main point is false today," Faliszek tweeted. When asked what he meant about "today," Faliszek continued, "I am not going to make a conjecture of what he was told 10 years ago etc but you can see the proof online today this isn't true and it's not captured in the agreement so..."

Faliszek linked to two games—Dying Light: The Following and Ghostrunner—which at the time were priced lower on GOG than they are on Steam.

Indie developer Joe Wintergreen questioned Faliszek's conclusions, however, saying that he knows "several devs" who have also been told that they're not allowed to undercut Steam prices on other storefronts. He also suggested that the policy doesn't necessarily have to be codified to have an impact.

"I think you would be hard pressed to find a dev subject to Steam's whims that would share your trust in their never having policies outside their agreements," he tweeted.

"All you've said is you don't think there's anything about this in their agreement. I know several devs who say this has happened to them. Valve don't have to reach out, they just have to say no when you check it's okay. 'There are many examples of non-price-parity' and 'Valve will sometimes disallow you from doing that' can both be true."

Wintergreen also posted an image of part of an online form for requesting Steam keys to sell on other platforms, which requires the developer to certify that they are "not giving Steam customers a worse deal" than they'd get on other storefronts. The language it contains is notably flexible:

Wolfire's lawsuit references that key request form as well, saying that Valve allows developers to sell a limited amount of Steam keys through other stores, but "has rigged the Steam Keys program so that it serves as a tool to maintain Valve’s dominance."

"Put explicitly by Valve, 'We want to avoid a situation where customers get a worse offer on the Steam store'," the suit states. "But that is equivalent to preventing gamers from obtaining a better offer from a competing distributor. The effect of this rule is to stifle competition."

It seems like an awful lot of confusion over what should be a fairly simple, yes-or-no question about what policies Valve has, if any, regarding pricing parity on other storefronts. Faliszek wasn't speaking in any kind of official capacity—he left Valve in 2017 and is currently doing his own thing at Stray Bombay Company—and the games he cited as examples of lower pricing were both currently on sale on GOG, but at regular price on Steam.

And Rosen's lawsuit isn't the only one to make the assertion that Valve has final say over game pricing on Steam. A different suit, filed in January against Valve and a number of game developers, makes the same claim, saying that "Valve abuses the Steam platform’s market power by requiring game developers to enter into a 'Most Favored Nations' provision contained in the Steam Distribution Agreement whereby the game developers agree that the price of a PC game on the Steam platform will be the same price the game developers sell their PC games on other platforms." 

Epic CEO Tim Sweeney has also previously accused Valve of holding "veto power" over pricing, and using it to enforce price parity.

Given the longstanding uncertainty, it does seem possible that Valve takes a discretionary approach to ensuring developers don't step too far out of line on other storefronts, and won't have any kind of firm policy on the matter unless and until the courts mandate one. On a related note, Valve has been quietly tweaking its Steam Direct submission guidelines, and its judgments have confused at least one adult game dev. 

I've reached out to Valve and Rosen for more information, and will update if I receive a reply.