Millions of Steam users woke up this morning with a notice from Valve: The multi-faceted gaming company updated its Steam Subscriber Agreement to remove a requirement that disputes go to arbitration as opposed to court. Now, if you have a dispute, you’re required to take the company to federal or state court in King County, Washington.
Legal experts consider this a win for Steam users, even if most of them will likely never take Valve to court. Consumers are usually required in such agreements to arbitrate and not sue — at least, in the United States. Previously, Valve forced its disputes into arbitration — when a third party reviews an issue to resolve it outside of the legal system. The update also removed Valve’s class-action waiver, which means class-action lawsuits from a group of people with the same complaint are now on the table.
“We’ve eliminated the requirement that disputes be resolved by individual arbitration,” Valve wrote in a news release. “As always, we encourage you to contact Steam Support when you have any issues, as that will nearly always be the best way to reach a solution. But if that doesn’t work, the updated SSA now provides that any disputes are to go forward in court instead of arbitration. We’ve also removed the class action waiver, as well as the cost and fee-shifting provisions, that were in prior versions of the SSA.”
Arbitration became a national headline earlier this year after Jeffrey Piccolo sued Disney and an on-site restaurant following his wife’s death; she died after having an allergic reaction after dinner, despite telling the restaurant about her allergies to dairy and nuts. Disney responded to the lawsuit by arguing Piccolo “waived his right to sue when he signed up for a Disney+ streaming account in 2019 and when he used the Disney World website in 2023,” Axios reported in August. The public was outraged, and Disney eventually backpedaled, allowing the suit to continue in court.
Valve’s decision to remove its arbitration clause is notable because most service agreements include an arbitration clause. (However, Greenberg Glusker’s Litigation Group partner Ira Steinberg, told Polygon that there’s currently a “trend of companies reconsidering arbitration.”)
A 1995 Supreme Court decision expanded the Federal Arbitration Act, which was originally intended to ensure voluntary arbitration agreements between businesses were upheld, to include consumer contracts with businesses. The Supreme Court has continued to support consumer-business arbitration in the decades that followed, making it near-guaranteed on most contracts. The problem with arbitration, according to the Economic Policy Institute, is that people must take issues to a “privatized, invisible, and often inferior forum in which they are less likely to prevail.” Typically, consumers don’t have the right to appeal arbitration decisions, either. Arbitration processes vary, but they’re typically ruled over by a third-party arbitrator or tribunal. Cases that go immediately to arbitration are private, which make them preferable to companies, too.
To recap: Steam users can now sue Valve, including with class action lawsuits
Critics of arbitration consider it to be more fair to allow consumers to take a company to court, which is an even, transparent playing field overseen by government officials like judges rather than private parties. Valve, in its update, also removed the class-action waiver, which previously prevented players from filing class-action lawsuits.
To recap: Steam users can now sue Valve, including with class action lawsuits.
So why would Valve do this? It may be a response to several law firms’ attempt to file “mass arbitrations,” wherein “hundreds or thousands of consumers bringing individual arbitration claims against the same company at the same time and over the same issue,” according to ClassAction.org. It’s essentially a loophole for class action waivers and arbitration clauses, though it still won’t end up in court. ClassAction.org, a class-action watchdog website, called it a “relatively new” way to take on corporations for consumer disputes. Several law firms have pursued this option, one of which was sued by Valve for allegedly attempting to “extort” the company with a threat of mass arbitration with more than 50,000 people. (This lawsuit was dismissed in August without prejudice, meaning Valve could re-file.)
The idea is that the sheer number of arbitration cases would force Valve to settle with all of them with the same resolution, instead of arbitrating them all individually. Arbitration is usually less expensive than litigation, but on this mass scale, it can easily become overwhelming for the company the disputes are with. “In states like California where businesses must pay most of the arbitration fees in a consumer claim, the business would be required to pay a filing fee for each individual claimant,” Steinberg said. “With fees of approximately $1,500 per claim, a claim with thousands of individuals could cost millions in filing fees.”
Valve has not provided any explanation as to why it’s making this change. Polygon has reached out to the company for comment.
