The UK specialist competition tribunal has certified the £656m legal claim against Valve brought by children’s rights campaigner, Vicki Shotbolt. This marks a significant first victory for the class of around 14 million PC gamers against Valve – the owner of popular gaming platform, Steam.
The claim alleges that Valve has abused its dominant position in the PC gaming market under UK competition law by imposing excessive commission charges and anti-competitive restrictions on game developers selling gaming titles on the Steam platform.
These excessive commission charges are passed onto consumers by way of increased prices for PC games and in-game content.
Ms Shotbolt, the class representative, asserts that Valve’s conduct has increased the prices of games across the entire market. Therefore the class is not limited to Steam users but also includes purchasers of PC games and downloadable content on other gaming platforms and distribution channels.
I am surprised how easily people are siding with Valve. I say this as someone who’s last console was the SEGA and is happy to see Valve improve Linux gaming.
That being said the 30% fee cut is clearly only possible due to lack of competition. In a competitive market, the cut would go down to service cost + some margin (subject to competition).
I don’t believe Valve or any other platform providers ever argued around economic reasoning for choosing specifically 30.
Lack of competition? WTF are you even talking about?
You’ve got Epic, GoG, itch.io, and not to mention publisher specific storefronts like origin, ubisoft’s whatever the hell launcher for PC.
That’s plenty of competition, it’s just that they suck at actual competition or are comfortable in their niche market.
I am not talking about the mere presence of competing entities. I am talking about market forces (in the real sense). If they were subject to market, they would not be able to charge an arbitrary 30% (because this figure would undercut to gain market share).
Alternatively, one can argue that the 30% cut has allowed Valve to develop a product which is superior to the competition and that’s why gamers often choose to buy their games there instead of other platforms. When Steam first became available, it was pretty terrible and there’s plenty of historical articles that clearly highlight that fact. Now, over the years, Valve has reinvested a share of their profits to improve the platform to a point where it is arguably the best product on the market. The 30% fee isn’t “anti competitive”, if it were, there wouldn’t be so many other options around. Punishing valve for having a superior product is just absurd.
By definition, a competitive fee/rate is controlled by the market, not by a single entity that set a rate ~20+ years ago.
This is not matter of punishing anyone, but recognizing reality; massive network effects, immense switching costs and lack of market driven rate setting.