Court denies dismissal in Wolfire Games v Valve antitrust case

Steam platform holder Valve will face antitrust litigation, a Washington judge ruled last week. According to a report from Bloomberg, indie developer Wolfire Games raised an antitrust case against Valve in April of 2021, claiming that the company is able to influence the larger games market thanks to its ubiquitousness in the digital marketplace. 

According to the ruling from Judge John C. Coughenour, the plaintiffs’ case held merit: “The company ‘allegedly enforces this regime through a combination of written and unwritten rules’ imposing its own conditions on how even non-Steam-enabled games are sold and priced,” Coughenour wrote. “These allegations are sufficient to plausibly allege unlawful conduct.”

The filing claimed that Valve’s 30% cut of game sales that take place on Steam is too high, especially with the platform accounting for around 75% of all PC sales. 

“Most developers have little or no choice but to sell on Steam and do as they’re told by Valve,” Wolfire CEO David Rosen said last year.

As such, Valve is in a position to have an impact on pricing in markets beyond just Steam, a conclusion that Judge Coughenour says warrants further discussion.

It’s important to know that this decision isn’t a definitive ruling on whether or not Steam is engaged in antitrust activity, but merely a denial of dismissal for which Valve filed in July. This distinction is key, according to attorney Richard Hoeg of Hoeg Law in Michigan.

“This is a simple order stating that the claims against Valve can’t be dismissed, but nothing has been proven,” Hoeg told GameDaily. “So the basic premise of ‘a judge agreed that there’s significant evidence that Steam’s influence is great enough that it could even influence’ is untrue.”

Rather, the court has found that the plaintiffs’ argument is sufficient enough to describe a potential legal injury that the law can address, Hoeg explained. 

“That’s the threshold question–did the complainants give the court a reason to think they could have a legitimate argument? These are the earliest stages of litigation, so really no actual evidence has yet been collected or entered.”

This case boasts many similarities to the prolific Epic v Apple case from last year. In that case, Fortnite maker Epic Games argued that Apple’s 30% cut of all App Store sales was tantamount to gouging given the company’s dominance of the mobile sector. A judge eventually ruled that both companies were operating unfairly.

There’s no doubt that the Epic v Apple decision will prove to be influential in future litigation. In fact, Hoeg said that its shadow may even reach this new case.

“In terms of my feeling on [Wolfire Games v Valve], as with Apple v Epic, the plaintiffs have a tough claim to make, particularly given Steam’s relatively consistent terms (i.e., there wasn’t a major price increase precipitating this), but even judges can sense a sea change on sentiment and political leanings on questions like these,” Hoeg said. “So while I think it’s a longshot, it may be less so than if the case was brought, say, 10 years ago.”

It will be interesting to track developments as the litigation moves forward. Many developers have spoken out against Valve’s revenue split, which was one of the selling points of the Epic Games Store upon its launch. Living in a post-Epic v Apple world, you can be sure much of the industry is monitoring the case.