`
`
`
`HON. JOHN C. COUGHENOUR
`
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`
`Wolfire Games, LLC, Sean Colvin, Susann
`Davis, Daniel Escobar, William Herbert, Ryan
`Lally, Hope Marchionda, Everett Stephens,
`individually and on behalf of all others
`similarly situated,
`
`
`Plaintiffs,
`
`
`
`v.
`
`
`Valve Corporation,
`
`
`Defendant.
`
`
`
`
` CASE NO. 2:21-CV-563
`
`
`
`CONSOLIDATED AMENDED CLASS
`ACTION COMPLAINT
`
`DEMAND FOR JURY TRIAL
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. 2:21-CV-563
`
`
`
`
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 2 of 100
`
`
`
`
`
`TABLE OF CONTENTS
`
`
`OVERVIEW OF THE ACTION ....................................................................................................... 1
`
`PARTIES ........................................................................................................................................... 6
`
`JURISDICTION AND VENUE ........................................................................................................ 8
`
`FACTUAL ALLEGATIONS ............................................................................................................ 9
`
`I. Background ............................................................................................................................... 9
`
`A.
`
`Valve—A PC Desktop Game Publisher Turned Gaming Platform Monopolist .............. 11
`
`II. Relevant Markets ..................................................................................................................... 14
`
`A.
`
`B.
`
`C.
`
`The Distinctiveness of PC Desktop Games ...................................................................... 14
`
`The Market for PC Desktop Gaming Platforms ............................................................... 20
`
`The Market for PC Desktop Game Distribution ............................................................... 24
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`III. Valve Possesses Monopoly Power In The Relevant Markets .............................................. 29
`
`A.
`
`B.
`
`The Steam Gaming Platform Is Dominant in the PC Desktop Gaming Platform Market 29
`
`The Steam Store Is Dominant in the PC Desktop Game Distribution Market ................. 34
`
`The Combined Steam Product Is Dominant in the Alternative PC Desktop Game
`C.
`Transaction Platform Market....................................................................................................... 35
`
`IV.
`
`Steam Has Unlawfully Monopolized the Relevant Markets ................................................ 36
`
`Valve Has Tied the PC Desktop Gaming Platforms Market to the PC Desktop Game
`A.
`Distribution Market ..................................................................................................................... 36
`
`1.
`
`2.
`
`3.
`
`The Steam Gaming Platform and the Steam Store Constitute Two Separate Products 37
`
`Valve Coerces Publishers into Using the Steam Store ................................................. 42
`
`Valve’s Tie Causes Anticompetitive Harm .................................................................. 45
`
`B.
`
`Valve Imposes the Valve PMFN on Publishers ............................................................... 48
`
`1.
`
`2.
`
`3.
`
`Valve Imposes the PMFN Through Written and Unwritten Rules ............................... 48
`
`The Valve PMFN Suppresses Price Competition Across the Industry ......................... 54
`
`The Valve PMFN Imposes Anticompetitive Harm ...................................................... 57
`
`V. Attempts at Entry Into the Relevant Markets Have Failed because of Valve’s Anticompetitive
`Restraints ......................................................................................................................................... 60
`
`A.
`
`B.
`
`Electronic Arts .................................................................................................................. 62
`
`Discord .............................................................................................................................. 64
`
`C. Microsoft, Amazon, Google ............................................................................................. 66
`
`D.
`
`Epic Game Store ............................................................................................................... 67
`
`VI. Valve’s Anticompetitive Practices Directly Harm Both Game Publishers and Game
`Purchasers ........................................................................................................................................ 71
`
`CLASS ACTION ALLEGATIONS ................................................................................................ 82
`
`INTERSTATE TRADE AND COMMERCE ................................................................................. 85
`
`CAUSES OF ACTION ................................................................................................................... 86
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`ii
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 3 of 100
`
`
`
`1
`
`PRAYER FOR RELIEF .................................................................................................................. 93
`
`JURY DEMAND ............................................................................................................................ 94
`
`
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`iii
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 4 of 100
`
`1
`
`Plaintiffs Wolfire Games, LLC, Sean Colvin, Susann Davis, Daniel Escobar, William
`
`2
`
`Herbert, Ryan Lally, Hope Marchionda, and Everett Stephens (“Plaintiffs”) bring this action
`
`3
`
`against Valve Corporation under federal and state antitrust laws and state unfair competition laws,
`
`4
`
`seeking public injunctive relief and damages, and allege as follows:
`
`5
`
`6
`
`OVERVIEW OF THE ACTION
`
`1.
`
`Video games are a vital part of American culture and industry. Many millions of
`
`7
`
`Americans play video games, creating hundreds of thousands of skilled jobs across the country
`
`8
`
`with a focus on computer science, artistry, and innovation. Personal Computer (“PC”) games, a
`
`9
`
`subset of video games, alone generate at least $30 billion worldwide annually. Of that sum,
`
`10
`
`approximately 75% flows through a single company, Defendant Valve Corporation (“Valve”).
`
`11
`
`2.
`
`Valve’s online game store, the “Steam Store,” dominates the distribution of PC
`
`12
`
`games. And Valve uses its dominance over PC game distribution to impose a 30% commission on
`
`13
`
`nearly every sale made through its store. This commission far exceeds what would prevail in a
`
`14
`
`competitive market and yields Valve billions of dollars in annual profits. Valve’s bloated
`
`15
`
`commission makes games more expensive for consumers to buy, while suppressing sales volumes
`
`16
`
`and revenues for game publishers.1 And with Valve extracting so much revenue from its middle-
`
`17
`
`man role, quality and innovation in the industry suffer.
`
`18
`
`3.
`
`Valve has been able to keep its commission fees at supracompetitive levels for
`
`19
`
`years by actively suppressing competition in order to protect its market dominance. Many other
`
`20
`
`game stores have tried to compete by charging lower fees to game publishers, in the range of 10-
`
`21
`
`15%, but they have all failed to achieve significant market share.
`
`22
`
`4.
`
`Valve maintains its dominance and thwarts effective competition by engaging in
`
`23
`
`two separate but related anticompetitive acts. First, Valve ties together the use of its gaming
`
`
`1 In the PC Desktop Game industry, the “developer” is typically the entity that creates the game
`while the entity that markets the game is typically referred to as the game “publisher.” Sometimes
`a single company undertakes both of these functions. While both terms are used throughout this
`Complaint interchangeably, the proposed class includes publishers as the entities that directly pay
`commissions to Valve.
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`1
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 5 of 100
`
`1
`
`platform to its store, requiring game publishers to sell their games in Valve’s store if they want
`
`2
`
`access to the “Steam” Gaming Platform, which is Valve’s PC Desktop Gaming Platform.2
`
`3
`
`Second, Valve imposes a Platform Most-Favored-Nations Clause (the “Valve PMFN”) on game
`
`4
`
`publishers, which inhibits the ability of publishers to sell their games at lower prices to consumers
`
`5
`
`through rival storefronts. Together, these anticompetitive acts protect Valve’s dominance in the
`
`6
`
`relevant markets and ensure Valve can continue to collect its 30% tax on nearly every sale of
`
`7
`
`computer games in the United States.
`
`8
`
`5.
`
`Valve’s tie works as follows. Valve knows that for PC games to succeed they
`
`9
`
`must, with rare exceptions, be compatible with the Steam Gaming Platform. The Steam Gaming
`
`10
`
`Platform provides a software environment where gamers can maintain their library of games,
`
`11
`
`connect with other gamers for social networking and multiplayer gaming, and access other
`
`12
`
`ancillary services like the tracking of gaming achievements. The Steam Gaming Platform is by far
`
`13
`
`the largest PC Desktop Gaming Platform in the United States (and the world), and PC game
`
`14
`
`publishers consider it essential for their games to be compatible with the Steam Gaming Platform
`
`15
`
`in order to reach the vast majority of their potential customers.
`
`16
`
`6.
`
`But if a game publisher wants to sell a game that is enabled for the Steam Gaming
`
`17
`
`Platform, Valve mandates by contract that the publisher list the game for sale in the Steam Store,
`
`18
`
`where it is subject to Valve’s 30% commission on nearly every sale.3 Game publishers have no
`
`19
`
`ability to avoid this arrangement by, for example, selling games enabled for the Steam Gaming
`
`20
`
`Platform only through other distributors. Valve prohibits that competitive option.
`
`21
`
`7.
`
`To the extent Valve allows a publisher to make any sales of Steam-enabled games
`
`22
`
`through other storefronts at all, Valve polices such sales with a heavy hand, ensuring they do not
`
`
`2 While gamers, publishers, and industry insiders sometimes colloquially refer to Steam as a
`single product, there are in fact two separate components to Steam—the Steam Gaming Platform
`(where games are played) and the Steam Store (where games are bought and sold).
`
`3 Before October 1, 2018, Valve charged a 30% commission fee on all game sales. As of
`October 1, 2018, Valve has three tiers for its commission fee: 30% on all of a game’s earnings
`under $10 million; 25% on all of a game’s earnings between $10 million and $50 million; and
`20% on all of a game’s earnings over $50 million. The vast majority of sales to consumers
`through the Steam Store are at the 30% commission rate.
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`2
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 6 of 100
`
`1
`
`constitute a threat to Valve’s dominance. For example, if Valve learns that a publisher is selling a
`
`2
`
`substantial number of Steam-enabled games through competing stores, Valve will threaten that
`
`3
`
`publisher with punishment which can include having their game removed from the Steam platform
`
`4
`
`entirely. Valve’s tie thus ensures that any publisher seeking access to the Steam Gaming Platform
`
`5
`
`must agree that the vast majority of its digital game sales will be through the Steam Store, where
`
`6
`
`Valve takes its 30% cut.
`
`7
`
`8.
`
`In addition, Valve uses its PMFN to control the prices of games sold in the Steam
`
`8
`
`Store and in other stores. Valve’s PMFN mandates that a game publisher cannot sell games that
`
`9
`
`are for sale in the Steam Store at lower prices in any other store, and Valve even applies that price-
`
`10
`
`parity restriction to game versions that are not enabled for the Steam Gaming Platform.
`
`11
`
`9.
`
`To illustrate how the PMFN works, consider a game publisher who develops a
`
`12
`
`game called “GAME ONE.” Given Valve’s dominance, that publisher will almost certainly need
`
`13
`
`to market a version of the game that is enabled for the Steam Gaming Platform in order for it to be
`
`14
`
`commercially viable. Pursuant to the tie, Valve then requires that the game be sold in the Steam
`
`15
`
`Store, where the publisher must set its price high enough to account for Valve’s 30% commission.
`
`16
`
`Valve might allow the publisher to sell a small volume of Steam-enabled games outside of the
`
`17
`
`Steam Store, but requires that they be sold at prices higher or equal to the Steam Store price.
`
`18
`
`10.
`
`And it does not stop there. Suppose the game publisher also develops a version of
`
`19
`
`GAME ONE that is not enabled for the Steam Gaming Platform and will not be sold in the Steam
`
`20
`
`Store. Valve interprets its PMFN to mandate that the publisher cannot sell that version in other
`
`21
`
`stores for a cheaper price, even when the competing store has a much lower commission. Valve
`
`22
`
`thus prevents the game publisher from selling at a lower price on the alternative store, even when
`
`23
`
`the publisher profitably could do so, and thus effectively blocks all price competition.
`
`24
`
`11.
`
`As explained by the founder and CEO of Epic Games (“Epic”), one company that
`
`25
`
`has tried to compete against Valve, “Steam has veto power over prices, so if a multi-store
`
`26
`
`27
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`3
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 7 of 100
`
`1
`
`developer wishes to sell their game for a lower price on the Epic Games store than Steam, then: 1)
`
`2
`
`Valve can simply say ‘no.’”4
`
`3
`
`12.
`
`Valve makes game publishers agree to the PMFN as a requirement to access the
`
`4
`
`Steam Gaming Platform. Valve explicitly requires that publishers agree that games sold elsewhere
`
`5
`
`must be sold “in a similar way to how you sell your game on Steam.”5 And Valve interprets this
`
`6
`
`language to encompass price parity, forcing game publishers to charge the inflated Steam Store
`
`7
`
`price across the marketplace, on all game sales, even sales of games that are not enabled for the
`
`8
`
`Steam Gaming Platform.
`
`9
`
`13.
`
`Valve’s PMFN harms the entire industry by removing the ability of competitive
`
`10
`
`forces to drive lower commissions and lower prices. Absent Valve’s PMFN, competitive forces
`
`11
`
`would put downward pressure on Valve’s bloated 30% commission when game publishers sold
`
`12
`
`games for less on stores that charge lower commissions. Those competitive pressures would force
`
`13
`
`Valve to lower its commission in an effort to compete on price with its rivals. That would
`
`14
`
`promote competition and lead to overall lower prices, benefiting game publishers and consumers
`
`15
`
`alike. But Valve’s anticompetitive PMFN blocks these benefits from occurring.
`
`16
`
`14.
`
`Because of Valve’s tie and its PMFN, other competing game stores cannot drive
`
`17
`
`volume to their stores by charging lower commissions, as Valve prevents game publishers from
`
`18
`
`selling their games for less on those stores. While several game stores have tried to compete with
`
`19
`
`Valve by charging lower commissions, those efforts have failed to make a dent in the Steam
`
`20
`
`Store’s market share because publishers using those distributors had to charge the same inflated
`
`21
`
`prices they set on the Steam Store.
`
`22
`
`15.
`
`Similarly, publishers cannot discipline Valve’s excessive commissions by steering
`
`23
`
`gamers to lower-commission storefronts with lower retail prices. Thus, publishers reluctantly
`
`
`4 Tim Sweeney (@TimSweeneyEpic), Twitter (Jan. 30, 2019, 9:29 AM),
`https://twitter.com/timsweeneyepic/status/1090663312814157824?lang=en.
`
`5 Steamworks Documentation, Steam Key Rules and Guidelines,
`https://partner.steamgames.com/doc/features/keys.
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`4
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 8 of 100
`
`1
`
`market their games primarily through the dominant Steam Store where, year after year, Valve
`
`2
`
`continues to take its 30% fee on nearly every sale. No wonder that a former Valve employee
`
`3
`
`described the Steam Store as a “virtual printing press” that imposes a “30% tax on an entire
`
`4
`
`industry.”6
`
`5
`
`16.
`
`Relatedly, Valve also mandates that publishers use its “Steam Wallet” for any in-
`
`6
`
`game purchases. Specifically, Valve requires that: “For any in-game purchases, you’ll need to use
`
`7
`
`the microtransaction API so Steam customers can only make purchases from the Steam Wallet.”
`
`8
`
`When publishers comply and use Valve’s microtransaction system, they again must pay Valve’s
`
`9
`
`30% supracompetitive commission.
`
`10
`
`17.
`
`Valve’s anticompetitive scheme has been wildly successful. It has cemented
`
`11
`
`Valve’s dominance and its ability to extract supracompetitive profits, with no end in sight.
`
`12
`
`Innovation is the engine of the video game industry, but Valve’s imposition of its
`
`13
`
`supracompetitive tax suppresses innovation and output across the industry while elevating the
`
`14
`
`prices of PC Desktop Games. Forced to pay Valve’s exorbitant tax, game publishers have fewer
`
`15
`
`resources to invest in creating new games and must charge higher prices than they would in a
`
`16
`
`competitive market.
`
`17
`
`18.
`
`The global market for PC Desktop Games is worth approximately $30 billion
`
`18
`
`annually, about $20 billion of which is revenue from in-app purchases made primarily in “free to
`
`19
`
`play” games and $10 billion of which is revenue from upfront purchases. With the Steam Store’s
`
`20
`
`75% share, that means approximately $7.5 billion in upfront sales occur through the Steam Store
`
`21
`
`per year, and Valve receives about $2 billion or more per year from Steam Store commissions
`
`22
`
`largely just for serving as a middleman between publishers and gamers. With roughly 350
`
`23
`
`employees, Valve’s per-employee profit from the storefront alone is over $5 million, making
`
`24
`
`Valve, by that metric, one of the most profitable companies in the world.7
`
`
`6 Andrew McMahon, Former Valve Employee Says Steam Was Killing PC Gaming, Epic Games
`Is Saving It, TWINFINITE (Apr. 8, 2019), https://twinfinite.net/2019/04/former-valve-employee-
`says-steam-was-killing-pc-gaming-epic-games-is-saving-it/.
`
`7 As a private corporation, Valve does not make its financial statements publicly available.
`
`25
`
`26
`
`27
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`5
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 9 of 100
`
`1
`
`19.
`
`These are astonishing figures for Valve’s limited middleman role, and these
`
`2
`
`sustained inflated profits reflect that competition is not working as it should. Meanwhile, Valve
`
`3
`
`devotes only a small percentage of its revenue to maintaining and improving the Steam Store, and
`
`4
`
`dedicates very few employees to that effort.
`
`5
`
`20.
`
`Ultimately, the only way for game publishers to avoid Valve’s anticompetitive
`
`6
`
`scheme is to avoid the Steam Gaming Platform altogether, and not sign any agreements or
`
`7
`
`contracts with Valve. But time and time again, when publishers or other market participants have
`
`8
`
`tried to create or utilize alternative PC Desktop Gaming Platforms, they have failed to obtain
`
`9
`
`sufficient scale to challenge Valve because of Valve’s dominance and anticompetitive restraints.
`
`10
`
`These failed efforts include some by the most sophisticated and largest gaming and technology
`
`11
`
`companies in the world, such as Electronic Arts (“EA”), Microsoft, Amazon, and Epic.
`
`12
`
`21.
`
`The failure of these deep-pocketed companies to challenge Valve in this space
`
`13
`
`demonstrates that Valve’s monopoly power in both the PC Desktop Gaming Platform (through the
`
`14
`
`Steam Gaming Platform) and PC Desktop Game Distribution (through the Steam Store) markets is
`
`15
`
`durable and virtually impossible to overcome given the conduct challenged in this action.
`
`16
`
`22.
`
`At bottom, Valve’s scheme imposes a bloated tax on the PC Desktop Gaming
`
`17
`
`industry. Valve forces game publishers to use the Steam Store and give Valve 30% of nearly
`
`18
`
`every sale if they want to gain access to the Steam Gaming Platform—access they need in order to
`
`19
`
`sell their games. In order to afford Valve’s 30% commission, game publishers must charge higher
`
`20
`
`prices to consumers and have fewer resources for innovation and creation. Game quality and
`
`21
`
`choice suffers as a result, and gamers are injured by paying higher retail prices for fewer and
`
`22
`
`lower-quality games. Competition, output, and innovation are suppressed, in ways that can never
`
`23
`
`be fully redressed by damages alone. Thus, in addition to damages, injunctive relief removing
`
`24
`
`Valve’s anticompetitive provisions is necessary to bring competition to the market and benefit the
`
`25
`
`public as a whole.
`
`26
`
`27
`
`23.
`
`Defendant Valve Corporation is a Washington Corporation with a principal place
`
`PARTIES
`
`28
`
`of business at 10400 NE 4th ST, Suite 1400, Bellevue, Washington, 98004-5174. Valve, an
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`6
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 10 of 100
`
`1
`
`American video game developer, publisher, and digital distribution company, operates a PC
`
`2
`
`Desktop Gaming Platform (the “Steam Gaming Platform”) and a PC Desktop Game Distributor
`
`3
`
`(the “Steam Store”). As discussed herein, the Steam Store imposes an anticompetitive
`
`4
`
`commission of 30% on nearly every computer game sold.
`
`5
`
`24.
`
`Plaintiff Wolfire Games, LLC (“Wolfire Games”) is a video game publisher
`
`6
`
`headquartered in San Francisco, California. Wolfire Games has entered into Steam Distribution
`
`7
`
`Agreements with Valve to make Wolfire Games’ PC Desktop Games compatible with the Steam
`
`8
`
`Gaming Platform, and to sell its PC Desktop Games through the Steam Store. As a result of
`
`9
`
`Defendant’s anticompetitive practices, Wolfire Games has paid supracompetitive commissions to
`
`10
`
`Valve for each sale of its PC Desktop Games through the Steam Store.
`
`11
`
`25.
`
`Plaintiff William Herbert is a resident of Florida. Mr. Herbert has purchased PC
`
`12
`
`Desktop Games through the Steam Store. As a result of Defendant’s anticompetitive practices,
`
`13
`
`Mr. Herbert has paid supracompetitive prices for PC Desktop Games.
`
`14
`
`26.
`
`Plaintiff Sean Colvin is a resident of Carlsbad, California. Mr. Colvin has
`
`15
`
`purchased PC Desktop Games through the Steam Store. As a result of Defendant’s
`
`16
`
`anticompetitive practices, Mr. Colvin has paid supracompetitive prices for PC Desktop Games.
`
`17
`
`27.
`
`Plaintiff Susann Davis is a resident of Bowling Green, Kentucky. Ms. Davis has not
`
`18
`
`agreed to the Steam Subscriber Agreement. Ms. Davis has purchased PC Desktop Games through
`
`19
`
`the Steam Store for her minor child, who has his own Steam account. As a result of Defendant’s
`
`20
`
`anticompetitive practices, Ms. Davis has paid supracompetitive prices for PC Desktop Games.
`
`21
`
`28.
`
`Plaintiff Daniel Escobar is a resident of New York, New York. Mr. Escobar has
`
`22
`
`purchased PC Desktop Games through the Steam Store. As a result of Defendant’s
`
`23
`
`anticompetitive practices, Mr. Escobar has paid supracompetitive prices for PC Desktop Games.
`
`24
`
`29.
`
`Plaintiff Ryan Lally is a resident of San Diego, California. Mr. Lally has purchased
`
`25
`
`PC Desktop Games through the Steam Store. As a result of Defendant’s anticompetitive practices,
`
`26
`
`Mr. Lally has paid supracompetitive prices for PC Desktop Games.
`
`27
`
`30.
`
`Plaintiff Hope Marchionda is a resident of Bowling Green, Kentucky. Ms.
`
`28
`
`Marchionda has not agreed to the Steam Subscriber Agreement. Ms. Marchionda has purchased
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`7
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 11 of 100
`
`1
`
`PC Desktop Games through the Steam Store for her minor child, who has his own Steam account.
`
`2
`
`As a result of Defendant’s anticompetitive practices, Ms. Marchionda has paid supracompetitive
`
`3
`
`prices for PC Desktop Games.
`
`4
`
`31.
`
`Plaintiff Everett Stephens is a resident of Cincinnati, Ohio. Mr. Stephens has
`
`5
`
`purchased PC Desktop Games through the Steam Store. As a result of Defendant’s
`
`6
`
`anticompetitive practices, Mr. Stephens has paid supracompetitive prices for PC Desktop Games.
`
`7
`
`8
`
`JURISDICTION AND VENUE
`
`32.
`
`Plaintiffs bring this action under Sections 4 and 16 of the Clayton Act, 15 U.S.C.
`
`9
`
`§§ 15 and 26, to recover treble damages and costs of suit, including reasonable attorneys’ fees,
`
`10
`
`against Valve for the injuries to Plaintiffs and the Class, alleged herein, arising from Valve’s
`
`11
`
`violations of Section 2 of the Sherman Act, 15 U.S.C. § 2, and Section 1 of the Sherman Act, 15
`
`12
`
`U.S.C. § 1. Plaintiffs also assert claims under Washington’s Consumer Protection Act, RCW
`
`13
`
`19.86, seeking treble damages and injunctive relief under RCW 19.86.090.
`
`14
`
`33.
`
`The Court has subject matter jurisdiction over this action pursuant to Sections 4 and
`
`15
`
`16 of the Clayton Act, 15 U.S.C. §§ 15(a) and 26, as well as pursuant to 28 U.S.C. §§ 1331 and
`
`16
`
`1337(a). The Court has supplemental jurisdiction over Plaintiffs’ state law claims pursuant to 28
`
`17
`
`U.S.C. § 1367.
`
`18
`
`34.
`
`This Court has personal jurisdiction over Valve because Valve’s headquarters are
`
`19
`
`located in Bellevue, Washington. Valve has engaged in sufficient minimum contacts with the
`
`20
`
`United States and has purposefully availed itself of the benefits and protections of both United
`
`21
`
`States and Washington law such that the exercise of jurisdiction over Valve would comport with
`
`22
`
`due process.
`
`23
`
`35.
`
`Valve also is subject to personal jurisdiction because, either directly or through its
`
`24
`
`agents or affiliates, Valve transacted business throughout the United States, including in this
`
`25
`
`District, that was directly related to the claims at issue in this action.
`
`26
`
`36.
`
`Additionally, the Court has jurisdiction over Valve because its principal place of
`
`27
`
`business is in Washington State.
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`8
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 12 of 100
`
`1
`
`37.
`
`Venue is proper in this District pursuant to 15 U.S.C. §§ 15(a) and 22 because
`
`2
`
`Valve is found in and transacts business in this District.
`
`3
`
`38.
`
`Venue also is proper pursuant to 28 U.S.C. § 1391(b), (c), and (d) because, during
`
`4
`
`the relevant period, Valve resided, transacted business, was found, or had agents in this District; a
`
`5
`
`substantial part of the events or omissions giving rise to these claims occurred in this District; and
`
`6
`
`a substantial portion of the affected interstate trade and commerce discussed herein was carried out
`
`7
`
`in this District.
`
`8
`
`FACTUAL ALLEGATIONS
`
`9
`
`I.
`
`BACKGROUND
`
`10
`
`39.
`
`A video game is an electronic game that can be played on a computing device, such
`
`11
`
`as a PC, gaming console, smartphone, or tablet. As of 2021, there are roughly 3 billion video
`
`12
`
`game players worldwide.
`
`13
`
`40.
`
`Video games are subcategorized by the type of device on which gamers play them,
`
`14
`
`including computer games (e.g., PC games), console games (e.g., PlayStation or Xbox games),
`
`15
`
`and mobile games (e.g., games played primarily on smartphones or tablets). Any game developed
`
`16
`
`for a particular type of device will only work for that type of device (e.g., a PC game will work
`
`17
`
`only on a PC), and, as detailed below, different versions of PC games are often also created for
`
`18
`
`specific PC Desktop Gaming Platforms, like the Steam Gaming Platform.
`
`19
`
`41.
`
`PC Desktop Games are video games that are downloaded and installed onto a PC
`
`20
`
`device. Although such games vary in size, scope, type, and features, they all involve the ability to
`
`21
`
`load the game directly from the user’s computer and then allow the user to play the game from that
`
`22
`
`computer. All require installation on the user’s PC to work, and all save data on the user’s PC,
`
`23
`
`both for the purposes of running the game, as well as for saving game progress or preferences
`
`24
`
`(such as control schemes, sound and video preferences, etc.).
`
`25
`
`42.
`
`PC Desktop Games are almost as old as PCs themselves. PCs first came to
`
`26
`
`prominence in the 1980s and, at that time, numerous game publishers released games for this new
`
`27
`
`type of computing device. As PCs’ popularity grew, so, too, did the popularity of PC Desktop
`
`28
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`9
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`
`
`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 13 of 100
`
`1
`
`Games. In 2020, the revenue from the worldwide PC Desktop Gaming Market was at least $30
`
`2
`
`billion.
`
`3
`
`43.
`
`For most of the history of the PC Desktop Game industry, due to technology
`
`4
`
`limitations, gamers purchased most PC Desktop Games at brick-and-mortar locations. When
`
`5
`
`users purchased such games, they received physical media, such as a CD-ROM, that could be
`
`6
`
`brought home and installed on their computers.
`
`7
`
`44.
`
`As technology improved, digital distribution slowly took hold beginning in the
`
`8
`
`1980s and 1990s. One of the first examples came in 1983 with the GameLine service for the Atari
`
`9
`
`2600, developed by Control Video Corporation (“CVC”). GameLine allowed users to rent and
`
`10
`
`download games over telephone lines. CVC gradually expanded the services it provided and
`
`11
`
`became America Online (“AOL”) in 1991.
`
`12
`
`45.
`
`AOL launched with a number of games, including Neverwinter Nights, an online
`
`13
`
`multiplayer game based on Dungeons & Dragons. Thousands of p