Valve and Sony sued for creating monopolies with their stores

Published on 08 May 2021

Valve and Sony are being accused of creating digital monopolies with their game stores. Lawsuits have been filed against both companies in the United States.

The suit against Valve

A class action lawsuit was filed by Wolfire Games on April 27th in the District of Washington against Valve. The suit alleges that Valve has created a digital monopoly through its service Steam and is partaking in anticompetitive practices. The main concern game developers have is regarding Valve's control over pricing for games. According to a letter that was written by Wolfire Games CEO, David Rosen, Valve utilizes its dominant position in the market to dictate how developers price their games on competing platforms. The company insists that developers sell their games on other platforms for the same price as what they are selling for on Steam. Valve threatens to remove the game from Steam if developers sell their titles at a lower price on other platforms like their own website or competitor platforms like Epic Games Store. Steam is Valve's digital video game distribution service. The platform has 120 million monthly active users and has a dominant lead over its competitors. Leaving gamers with little choice but to comply with the company's wishes in order to reach users. 

See also: EU accuses Apple of antitrust violations

The suit against Sony

Unlike the class action against Valve, the suit against Sony has been filed by Agustin Caccari an individual. The suit was filed on May 5th in the Northern District of California. Caccari alleges that by removing the ability for retailers to sell digital PlayStation games, Sony has created a digital monopoly and is able to charge very high prices for the games. Two years ago, Sony removed the ability for digital codes of PlayStation games to be sold by retailers like Amazon, GameStop, etc. Thus the only way to get digital PlayStation games as of now is through the PlayStation Store. The company also requires that game developers and publishers who are selling titles on the PlayStation store relinquish any and all control over the retail prices of the games. Thus there is no price competition for digital PlayStation games. The suit alleges that this policy allows Sony to charge extremely high prices for digital games which are significantly higher than the price of physical counterparts of the same games sole in the competitive retail market. The suit also alleges that the price for these digital games would be significantly lower if the digital games market was competitive.

There seems to be a growing movement against digital monopolies. Epic Games has taken Apple to court accusing the company of similar practices on the App Store. The Australian and European governments are also taking action against Google and Apple for their monopolistic practices and dominants positions in the App Store markets. It's clear that the biggest winners at the end of all of this will be the consumers.  

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