On November 25th, 2024, U.S. Western District Court of Washington Judge Jamal N. Whitehead certified a class of approximately 32,000 game developers who accuse digital PC game distributor Valve Corp. of stifling competition in the Personal Computer (“PC”) game distribution market through its Steam platform. Wolfire Games LLC, et al. v. Valve Corp., et al., Docket No. 2:23-mc-00037 (W.D. Wash. Apr 26, 2023).
Defendant, the largest video game distributor in the world, started out developing its own games, but now leaves this task to others and, instead, sells and distributes those games to end users through its Steam platform offering over 50,000 titles for sale and play.
Plaintiff developers allege that defendant violated Sections 1 and 2 of the Sherman Act and Washington’s Consumer Protection Act by imposing a Platform Most-Favored-Nations (PMFN) policy on developers who sell their games on Steam. The PMFN policy allegedly requires content parity, such that developers are required to sell their games at the same or higher price and with the same or inferior content on other platforms as sold on Steam. Plaintiffs contend violations of the PMFN policy could result in punitive measures from defendant, such as removal of games from its in-platform marketing efforts or even being delisted from the Steam store altogether.
In support of their arguments, plaintiffs put forth expert testimony claiming that the PMFN policy allows defendant to charge inflated commissions of 30% on Steam sales, while foreclosing competition from rival platforms and harming consumers and developers alike.
Defendant opposed plaintiffs’ motion for class certification on two grounds. First, defendant objected to plaintiffs’ overly broad market definition because it excluded other game forms beyond PC gaming, such as console or mobile, and other distribution methods such as physical games and cloud download. However, Judge Whitehead found that plaintiffs had defined a cogent market, based on the distinct characteristics and preferences of PC game players and developers, noting that downloaded PC games are materially distinct from other forms, based on evidence submitted by plaintiffs’ expert supporting their market definition.
Second, defendant challenged “whether Plaintiffs have shown sufficient Rule 23(b)(3) commonality and predominance,” and attempted to exclude plaintiffs’ expert testimony that antitrust damages can be accurately measured across the class. Defendant further alleged that its PMFN policy is not common across all named developers, games, or applications, but instead varies in rates and commission fees.
The Court, however, admitted plaintiffs’ expert testimony and sided with plaintiffs, finding that they had met the requirements of Rule 23 of the Federal Rules of Civil Procedure for class certification. Plaintiffs presented common evidence of Valve’s PMFN policy and its anticompetitive effects, based on contractual terms, communications, and industry understanding.
This case is one of several pending antitrust cases against defendant, some of which involve similar claims by consumers who purchased games on defendant’s Steam platform. While reserving judgment on the merits of plaintiffs’ antitrust claims, the class certification order is a significant victory for plaintiffs.
