Steam Backs Down From Forced Arbitration

So, this is an unusual move. Valve is _removing_ its clause for forced
arbitration in the Steam user agreement.*


Forced arbitration is a legal clause of many user agreements that says
that if you get into a legal dispute, instead of taking it to court,
you have to go to a private arbiter, who will look at both sides of
the disagreement and then decide who's right. Nominally, this speeds
up disputes, but because it is usually a large corporation who chooses
the arbiter, there's a strong suspicion that the arbiter will tend to
favor the corporation over the end-user. After all, an arbiter who
repeatedly favors the end-user over the corporation won't stay as the
corporations arbiter for long! In addition, arbitration requires that
both sides pay for the service, which can put disproportional burden
on the end-user. While arbitration itself isn't a bad idea, it's
terrible when it's forced on end-users. Unfortunately, it's become
increasingly common amongst American companies, and pretty much any
user-agreement or contract you might sign these days will include a
forced arbitration agreement.


    [Fortunately, in many civilized --read, outside the USA--
     jurisdictions, forced arbitration is either illegal or
     greatly restricted. So if you're in the UK, Australia
     or many countries of the EU, any EULAs either won't have
     any forced arbitration clauses, or if they do, those
     clauses are unenforceable]


That's why it's so unusual to see Valve backing away from forced
arbitration. Because, until today, that WAS something in the Steam
EULA. If you ever got into a legal dispute with Valve (and lived in
the US), you were going to have to settle it under the aegis of their
arbiter. Until today, that is.


See, there is one downside to forced arbitration. _Both_ sides have to
pay the arbiter. Now, if it's Valve against just one or two people,
that cost is just peanuts. But if you assemble a large group of people
-a class- and sue all at once, those arbitration costs suddenly
skyrocket. And this is exactly what happened here. Accused of
colluding to keep video-game prices high, a law firm has been
threatening to bring arbitration from up to 75,000 clients... which
would have cost Valve more than $200 million dollars USD _just_ for
the arbitration costs (more if the arbiter finds them guilty).


This technique has been used against forced arbitration before, and
while Valve is bemoaning 'unscrupulous lawyers', it's their forced
arbitration clause that is ultimately at fault. I don't feel much
sympathy for them. Forced arbitration is a shitty tactic, and its
popularity amongst large companies is _not_ to the benefit of anyone
other than their bottom line. That it backfired on Valve is purest
schadenfreude as far as I'm concerned.


It is, however, also notable that should you _not_ agree to this
change in the EULA, your only alternative is say goodbye to all your
games and delete your Steam account. It's a not-so-friendly reminder
that you don't actually own any of your games on Steam


    [Also, in a related news item, a new law** was passed in
     California requiring purveyors of digital goods to make
     it VERY clear that any purchases must indicate that you
     only have limited rights to that game. While not directly
     aimed at video-games, Ubisoft's antics with "The Crew"
     were definitely part of this. It won't prevent companies
     from pulling the rug out from beneath you, but they can't
     make it seem like you're 'buying' games from them anymore
     if they've the ability to take that game away at any time.
     It's sadly limited (and right now only affects residents
     of California) but it's a very necessary first step.]








 -----------------      
* the story about Steam
https://arstechnica.com/tech-policy/2024/09/steam-doesnt-want-to-pay-arbitration-fees-tells-gamers-to-sue-instead/
** the Ubisoft tale
https://www.pcgamer.com/gaming-industry/new-california-law-inspired-by-ubisoft-and-sony-requires-retailers-to-warn-consumers-that-the-digital-games-they-buy-can-be-taken-away-at-any-time/