In April, Humble Bundle creator Wolfire Games filed an antitrust suit against Valve. The claim is that Valve's policies around where and how developers can use free codes generated by the Steam Store represent a violation of anticompetitive behavior laws. This week, Valve fired back, saying that Valve and the Steam Store owe no one free codes, and its policies are sound.
The issue at hand
Valve offers developers and publishers that release their games through the Steam Store free codes, allowing the publisher to bypass the internal payment system. These codes are most often used to give reviewers access to the game for free and to fulfill Kickstarter benefits once the game is available. However, some publishers have tried using the codes for other purposes.
In particular, some publishers were using these codes for the fulfillment of purchases made through other storefronts. Take, for example, the Humble Bundle. A publisher might take their game, enter it into a Humble Bundle, and then fulfill the orders by using the free codes provided by Valve, allowing gamers to manage the game through the Steam Store.
Obviously, Valve loses money on each of these transactions, as they are providing the infrastructure for deployment and updating, without getting anything in return. So, the company put into effect a policy prohibiting publishers from using those free codes as fulfillment for other stores. This is where the lawsuit comes in, as Wolfire Games believes that this policy exerts an undue burden on publishers.
Clearly, the company does not believe it is doing anything wrong or they would not have implemented the policy. In the company's legal response, they laid out a number of essential points. The most important, and one they reiterate throughout the response, is that they are not required to give out free codes and that placing restrictions on those codes is reasonable.
Valve has no obligation to distribute Steam Keys, let alone to allow developers to use Steam Keys to undercut their Steam prices in other stores. Valve's guideline that developers offer customers buying their games on Steam as good a price as offered elsewhere via Steam Keys prevents developers from free-riding on Valve's investment in Steam. The antitrust laws impose no obligation on Valve to facilitate competition with itself.
Not all stores offer free products for their publishers. Valve always done this as a courtesy to make additional, unrelated business operations easier. Other stores charge for review or distribution codes, including other stores that offer games.
Arguing that placing limits on free codes is anticompetitive will be a difficult sell in a court room. In addition, there is another major challenge: Steam is far from a monopoly. The Epic Games Store has taken a huge chunk of the PC gaming market from Steam, while the Microsoft Store, especially combined with Game Pass, represents a statistically relevant portion of the market.
Publishers, including independent developers, have the option to distribute through either or both of these stores, making the argument for antitrust an even harder sell. If this were 10 years ago and Steam was the only relevant game in town, then maybe they could have gotten away with the argument. But, now that Steam has competition around it, it's a harder sell. If a publisher doesn't like the Steam policies, they can easily use Epic Games Store or the Microsoft Store to distribute their games.