The Judge Dismissed Valve's Defence, Now Steam Is Different.

Summary

On October 20, 2024, a major ruling against Valve by a U.S. District Judge could have costly repercussions, potentially involving tens of thousands of cases. In response, Valve updated the Steam Subscriber Agreement, affecting nearly all of North America. While the changes remove forced arbitration and allow class action lawsuits, deeper analysis reveals Valve's strategic move to limit legal exposure. By retroactively applying new terms, users must accept the agreement or lose access to their Steam accounts, complicating ongoing legal cases, including thousands of arbitration suits targeting Valve's practices.

Takeaways

• ⚖️ A US District Judge, John H Chun, dismissed an appeal from Valve on October 20, 2024, affecting tens of thousands of cases and possibly leading to significant financial costs for Valve.
• 📃 Following this decision, Valve updated its Steam Subscriber Agreement, removing forced arbitration and waiving the right to join class action lawsuits for many regions, including most of North America.
• 🕹️ The Steam Subscriber Agreement clarifies that users do not own the contents of their Steam libraries; they are merely licensing access to games.
• 🎉 The removal of the forced arbitration clause and class action waiver appears to be a win for consumers on the surface.
• 💼 Valve previously covered arbitration legal fees for claims under $10,000, but this has been removed in the new agreement, making lawsuits more likely to go through traditional courts.
• 💻 Valve’s new agreement applies retroactively, meaning any past disputes must now be resolved in Washington state or federal courts.
• 🚨 The changes came after Valve faced legal challenges over anti-competitive practices, particularly regarding Steam key pricing policies.
• ⚔️ Law firms Mason LLP and Ziger LLC are bringing tens of thousands of arbitration cases against Valve, potentially costing Valve a significant amount of money.
• 🔑 Valve has been accused of using its dominant market position to enforce price parity, preventing developers from selling games cheaper on other platforms.
• 🎮 Users who want to avoid the new terms would have to delete their Steam accounts, which is unlikely due to the value of their game libraries.

Q & A

What was significant about the court ruling on October 20, 2024, involving Valve?

On October 20, 2024, US District Judge John H Chun dismissed an appeal from Valve. This ruling was significant because it could impact tens of thousands of cases and become a costly situation for Valve.

What changes did Valve make to the Steam Subscriber Agreement following the court ruling?

Valve updated the Steam Subscriber Agreement for users outside the UK, EU, Australia, New Zealand, and Quebec. This change removed the forced arbitration clause and the waiver of the right to join a class action lawsuit.

What is the purpose of the Steam Subscriber Agreement?

The Steam Subscriber Agreement is a document that users must sign to have a Steam account. By agreeing to the terms, users acknowledge that they are licensing access to games, not owning them, and that Valve provides the account.

What are the benefits for consumers in the updated Steam Subscriber Agreement?

The updated agreement benefits consumers by removing the forced arbitration clause and allowing them to join class action lawsuits, which were previously waived.

Why do large companies like Valve prefer arbitration over court proceedings?

Companies prefer arbitration because it is usually faster, potentially cheaper, and it avoids setting legal precedents that could negatively impact their business. Arbitration also keeps disputes private.

Why did Valve's previous arbitration policy end up being costly for the company?

Valve's previous arbitration policy offered to cover legal fees for both sides if the case payout was under $10,000. This encouraged law firms to file thousands of individual arbitration cases, taking advantage of Valve's fee coverage.

What is the antitrust concern related to Valve's practices with Steam keys?

The antitrust concern revolves around Valve's enforcement of price parity. Valve does not allow developers to sell games cheaper on other platforms, even if those games don’t use Steam keys. This could be seen as leveraging Valve's dominant market position to reduce competition.

What legal tactics are law firms like Mason LLP and Ziger LLC using against Valve?

Mason LLP and Ziger LLC are filing tens of thousands of individual arbitration cases against Valve. By doing this, they aim to exploit Valve's arbitration agreement that covers legal fees under certain conditions.

How did Valve respond to the legal challenges posed by the arbitration cases?

Valve updated the Steam Subscriber Agreement to retroactively apply new terms, requiring that all disputes be handled in Washington state courts. This effectively limits the possibility of arbitration cases moving forward unless users delete their Steam accounts.

What is the impact of Valve's retroactive application of the new subscriber agreement?

The retroactive application of the new subscriber agreement forces users who are part of ongoing arbitration cases to either delete their Steam accounts or accept the new terms, which would invalidate their participation in those cases.

What potential future legal challenges could Valve face despite the recent updates to the subscriber agreement?

Valve could still face class action lawsuits, as the new agreement allows users to join such lawsuits. Law firms are financially incentivized to pursue these cases, which could be a significant legal challenge for Valve.