A Class Action Lawsuit was filed against Valve Corporation citing that Valve is abusing Steam platform’s market power.
The lawsuit further states that Valve requires the game developers to enter into a ‘Most Favored Nations’ provision through the popular digital platform Steam. This provision states that developers must sell their PC games at the same price as other platforms.
Furthermore, this lawsuit also addresses a concern where through MFN clauses games were being kept at a high price across other digital platforms such as Epic Store and Microsoft Store during a pandemic when gaming boomed.
The complaint also added that the Steam MFN is hindering innovation by creating an artificial barrier to entry for platforms.
“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.” States the complaint.
This new lawsuit comes days after antitrust authorities in the E.U. fined Valve over “geo-blocking” practices.