The move might have something to do with something called "arbitration overload".
If you live outside the United Kingdom or EU, you might’ve had a pop-up lunge into your Steam game today informing you, helpfully, that updates to the Steam Subscriber Agreement had affected your consumer rights.
That’s because Valve is removing both its class action waiver and forced arbitration clauses for affected countries, as the notice reads: “The updated dispute resolution provisions are in Section 10 and require all claims and disputes to proceed in court and not arbitration.”
A forced arbitration clause is, as the name suggests, a clause that forces those who agree to a contract to settle disputes by arbitration. Instead of going to court, you and the respondent—in this case, Valve—would have several meetings with an independent arbitrator, who is then able to give a legally-binding “award”.
What this clause can and can’t handle depends on a country’s individual laws—for example, in 2022, the United States Congress ended forced arbitration applying to sexual assault cases—but by and large, they’re considered a tidier way of handling legal disputes. They do, however, come under criticism often for handing a lot of power over to the respondent. Arbitrations don’t typically have juries, arbitrators can consider “apparent fairness” over the exact letter of the law, and if you lose the case it’s very hard to challenge.
So why has Valve made this change? Well, while I’ve reached out (and will update this article if I receive a response), I’m willing to bet “arbitration overload” has something to do with it.
Back in 2020, companies like Comcast and AT&T were ambushed when a few enterprising lawyers discovered that, as an alternative to class action lawsuits, people under forced arbitration could simply band together and file their requests for arbitration all at once. As the New York Times put it: “Many companies, it turns out, can’t handle the caseload.” It’s sort of like a real-world DDOS attack.
This resulted in companies like DoorDash having to foot bills in the millions after receiving 6,000 claims. DoorDash was later forced to pay out by federal judge William Alsup, who said (via NYT): “Your law firm and all the defense law firms have tried for 30 years to keep plaintiffs out of court … suddenly it’s not in your interest anymore. Now you’re wiggling around, trying to find some way to squirm out of your agreement.”
Turns out, Valve has actually been hit by such arbitration zergs, and recently, too. As reported by Reuters, late last year, Valve filed a lawsuit against Zaiger, a “small law firm”, after it alleged “antitrust violations on behalf of more than 50,000 customers of Valve’s game distribution platform Steam.”
In the case, Valve shared a series of slides in which the firm allegedly described the move as a “investment opportunity”, reading: “we could immediately begin recruiting claimants to pursue the claims a federal judge has now ruled are well plead and potentially viable but for which a billion“—that’s their bold and italicisation, not mine—”customers have been compelled to arbitration.”
There’s even a website, that’s still up if you go looking for it, which claims “you could be entitled to hundreds or thousands in compensation on account of these illegal business practices.”
Now, listen. While it’s entirely possible Valve has changed its policy on forced arbitration for some completely different reason, I would bet a decent sum that the headache of such a clause, in light of the Zaiger case, is probably part of why the company’s doing away with it. Steam’s new agreement reads that, to subscribers outside the UK and EU:
“You and Valve agree that all disputes and claims between you and Valve (including any dispute or claim that arose before the existence of this or any prior agreement) shall be commenced and maintained exclusively in any state or federal court located in King County, Washington, having subject matter jurisdiction.”
In other words, if you live in an affected country, then Valve will quite literally see you in court—and nowhere else, please.
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