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French High Court rules against Steam, says the company must allow the resale of game licenses

The High Court of Paris (abbreviated TGI, in English) ruled in favor of this French consumers union on September 17, which main criticism stems from the fact that Valve defines Steam purchases as subscriptions for content and services.
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Steam is by far the largest distribution platform of digital games in the world; established in 2003 by Valve Corporation, Steam has become a staple in the PC gaming world, but right now is facing a legal battle against a European union of consumers, the UFC Que Choisir to be precise.

This battle traces back to 2015 and has its origin in some controversial elements that can be found in Steam Subscriber Agreement, specifically the so-called subscriptions for content and services. 

The UFC Que Choisir pushes against Valve 

The High Court of Paris (abbreviated TGI, in English) ruled in favor of this French consumers union on September 17, which main criticism stems from the fact that Valve defines Steam purchases as subscriptions for content and services.

The TGI ruled that, technically speaking, Steam doesn’t sell any subscriptions, but in reality, sells digital licenses. The TGI goes to call digital games as “dematerialized games” and states that these can be resold just like any physical product. However, Steam’s user agreement strictly forbids the resell of games purchased within the platform. 

According to the French Court, this prohibition from Valve violates the EU Free Movement of Goods laws, which state that everything that has been sold in the EU, should be able to be resold without permission from the original seller. 

In this sense, the argument is the same as four years ago, “If we can sell a game cartridge or CD, why not a Steam game?” 

It is also important to recall that the case against Valve and the Steam platform goes beyond the resale of digital games. The report goes further and claims that Steam, in its license agreement, decrees that Valve has many other rights that, in reality, it does not have.

Such as: keeping funds from account wallets without reimbursing users who unsubscribe from their services. Up to 14 Steam clauses like this are deemed unacceptable by the French Court.

Consequences of the sentence

Valve has indicated that they will stand up to this decree, so they have assured that there will be no change in the platform while the case is open. Beyond allowing the resale of digital games, the sentence obliges the North American company to pay 30,000 Euros in damages caused to the collective, in addition to an additional penalty of 3,000 Euros per day for 6 months if they do not show in the main page of their APPs the entire sentence given by the courts.

If the verdict against Valve is applied, it is still unclear whether it could spread beyond France. Digital entertainment lawyer Jas Purewal recalled that this is not the first case about issuing a digital resale law in the European Union. Many similar situations occurred since 2012, but they have never proceeded.

Beyond the monetary fines or the change of policies in Steam, many game developers have been worried about this judgment, since they see it as a direct attack on their profits. The war against second-hand sales in the digital video game market is not new, the case of the G2A store being the most famous.

The French market seems to be the one who would be most harmed in the short term since many developers would simply avoid publishing their games in the country. This is serious, considering that it is the seventh consumer of digital games in the world.

Gaining ownership of the licenses of digital games could be even more damaging in the long term. The developers would lose interest in creating single-player experiences since the user would resell these soon. A digital game would not deteriorate over time as with the physical format, so there is no advantage in buying an unused digital copy.

The most affected in this case would be Indie developers, who are mostly dedicated to creating short-term games due to the limited budget (except for some exceptions in the genre). The only way to enter the digital market would be if they offer infinite experiences, multiplayer aspects, or are dedicated to so-called games as services.

Finally, the recent streaming games services would be consolidated as the most effective way to distribute single-player games, creating what is the “definitive DRM” from the users’ perspective.

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