Video Game Publisher/Seller Valve Now Forcing Customers Into Mandatory Binding Arbitration

Valve, the makers of popular video game series like Portal, Left 4 Dead, Half-Life, and Team Fortress, as well as the operators of the Steam online marketplace for games, have surprised fans this week by changing the Steam terms of service to effectively pre-empt any class-action lawsuits by forcing customers into mandatory binding arbitration.

“It’s clear to us that in some situations, class actions have real benefits to customers,” explained Valve in a statement. “In far too many cases however, class actions don’t provide any real benefit to users and instead impose unnecessary expense and delay, and are often designed to benefit the class action lawyers who craft and litigate these claims…

“Class actions like these do not benefit us or our communities. We think this new dispute resolution process is faster and better for you and Valve while avoiding unnecessary costs, and that it will therefore benefit the community as a whole.”

This move puts Valve — whose biggest offense until this point has been not telling the public if/when there will ever be a Half-Life 3 — in the same binding arbitration boat as many of the businesses that contend every year for Worst Company In America.

Now Valve is Trying to Stop People Suing Them, Too [Kotaku]

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  1. TuxthePenguin says:

    So any remark about their complains on the class-action system? I think its a major issue we have. Class action is about making lawyers rich, punishing a company, and the actual people harmed get next to nothing.

    • Applekid says:

      I’d answer, so what?

      A company’s bad faith or illegal actions can cause minor damage to an individual, but compounded across an entire class of individuals actually amounts to real money. This inability to scale makes it impossible to get fair representation, even without arbitration, because the value of the damage for the individual is far below the costs of fighting it. Now throw arbitration into the mix, and the actual people harmed still get next to nothing.

      Main difference is that a company no longer can get hit with punitive damages, which is the point of class actions. Compounding damages enables more efficient civil court challenges because the cost to fight is now on par with the damage done.

      I really don’t care, for example, that some class action lawyer got a metric fuckton of money for fighting the XBox RROD stuff, because it resulted in my RROD’d XBox getting fixed after 13 months from when I bought it. Imagine, if you will, what would have happened instead if we were unable to form a class and use the courts back then.

      • TuxthePenguin says:

        You are describing nothing more than what I said. As it stands, the company gets punished, the lawyers get rich and those actually harmed get next to nothing.

        What we need to do is “reform” class action suits so those that were harmed get something. Honestly, I saw one class action suit about artificially high diamond prices (IIRC) that would have gotten me $2. But the firm made it so that I had to mail it in, cutting out nearly 25% of my “winnings”.

        There has to be a better way. Because until that situation stops, binding arbitration can hide under the “its better for the consumer” argument without any real way to disprove it.

        • George4478 says:

          The people actually harmed get little from the suit because they risk nothing to join a class action.

          You want a big payout for damages you incurred — hire a lawyer, foot the bill, and accept the risk of losing your money.

          I’m not a big fan of class actions, but I can understand where the people fronting 100% of the lawsuit’s cost get a huge percentage of the payout.

        • fortymegafonzies says:

          DeBeers is on the hook for like $300 million plus due to their artificial inflation of diamond prices. The payouts are prorated, maybe you would get $2 because you bought one little diamond. Some dealer who bought thousands of diamonds will get substantially more. And yes, the attorneys will get rich — but who cares? DeBeers will presumably change their illegal price-fixing ways, and most people who were substantially harmed will get some money back.

        • jvanbrecht says:

          I was in the same boat with regards to my contacts, B&L were selling the exact same product under 2 different names at 2 different prices (daily disposables, and monthly disposables, of course you could have purchased the daily ones at a slightly higher cost initially, but wore each pair for a month, there by them last significantly longer, then those who ended up paying far more in the long run for the monthlies).

          You know what my take on that was (I have spent thousands on contacts over the last 25 years), $5 off my next lens purchase, which typically runs around $60 – $80 per box per eye… woopdy fucking doo…

          That said, I do believe there is a place for class action suits, but most are frivolous.

        • RvLeshrac says:

          A class-action lawsuit is to punish the company, not to enrich consumers. That’s exactly as it should be.

  2. Nidoking says:

    “You don’t like the way the Enrichment Center runs its testing facility? So sue me. Oh, wait. You can’t. Remember that paper you signed on the way in that had all that tiny, tiny text you couldn’t read without a microscope? Well, when I say ‘you’ signed it, I mean we had a company lawyerbot sign it for you, but it’s just as binding. Anyway, one of those subclauses said that you agree to arbitration in the case of any disputes, and I’m on retainer as Aperture’s designated arbitrator. I happen to think my process is quite fair. I just dangle you over a pit of acid until you agree to drop your complaint, or I drop you. Whichever comes first. It’s an established method with a 100% rate of finding in favor of at least one party, and only a 17% fatality rate. I’d say that’s pretty good for this company, wouldn’t you?”

  3. Loias supports harsher punishments against corporations says:

    Oh how cute, they are trying to justify their decision as a boon to customers rather than to their detriment.

    • Ben says:

      Yeah, I’m sure they’re so interested in looking out for my interests! That’s how businesses run, right? We shouldn’t trust those stinkin’ class action lawyers, but we can totally trust Valve’s lawyers!

  4. 8bithero says:

    Meh. It’s in almost every Terms of Service in existence now.

  5. ferozadh says:

    Still better than EA.

  6. dolemite says:

    Basically every company that has a contract is going to force customers into this. There is absolutely no pitfalls for the corporation, only benefits. The company they hire to arbitrate finds in their favor a majority of the time. The problem/issue is swept under the rug and kept secret from the public. They can also force the person to pay for the arbitration. Benefits to consumer? Err…

  7. YouDidWhatNow? says:

    MBA should be illegal, across the board. It’s wildly anti-consumer and provides no benefit whatsoever to the public. It benefits only the corporation enforcing it by giving them a free hall pass to flaunt the law and not have to worry about repurcussions in a courtroom.

    If anyone had any brains in their heads in our government, MBA would be wiped off the face of this country.

    • sqlrob says:

      I don’t know if it was intentional, but I agree with either possible reading. If it was intentional, +1 internets to you.

    • Lyn Torden says:

      Agreed. But imagine the consequences … corporate CEOs whining on the tables in front of Congressional committees. I’d have to watch something other than CSPAN.

  8. Misha says:

    Valve — whose biggest offense until this point has been not telling the public if/when there will ever be a Half-Life 3

    So we’re just going to sit here and ignore the part where their TOS states that they’ll permanently disable your account if you dare to do a chargeback? That seems like a bigger offense than the Half-Like 3 issue.

  9. Lyn Torden says:

    Businesses that add mandatory binding arbitration clauses to their legal terms of use are the same businesses that are planning to boost their violations of consumers.

  10. dush says:

    So everyone just stop buying things from Valve starting…now. Simple solution.

  11. do-it-myself says:

    I’ve done my part in protest as to not ever subscribing or purchasing anything from this service! :)

  12. 180CS says:

    Time to jump ship – over to the pirate ship!

  13. fnmatrix says:

    Ah, people getting worked up over nothing. TuxthePenguin is correct. Class-Action lawsuits do not benefit anyone but lawyers and punishing the company but people listed in the lawsuit get basically nothing. If you have a complaint, Valve allows a single user to file a lawsuit and will cover some costs. Quote from their TOS:

    “whenever a customer is unhappy with any transaction, our first goal is to resolve things as quickly as possible through the normal customer support process. However in those instances in which we can’t resolve a dispute, we’ve outlined a new required process whereby we agree to use arbitration or small claims court to resolve the dispute. In the arbitration process, Valve will reimburse your costs of the arbitration for claims under a certain amount. Reimbursement by Valve is provided regardless of the arbitrator’s decision, provided that the arbitrator does not determine the claim to be frivolous or the costs unreasonable. ”

    Another article I found said the limit for cost is $10,000.

  14. shufflemoomin says:

    I think, if anything, this is going to *cause* a class-action. If you don’t agree to these new terms, you can’t keep an account, therefore losing access to all games that you’ve paid for. How is that not essentially blackmail? “Agree to what we want or lose something?” I don’t agree to these new terms but I also don’t want to lose games I’ve paid for. If anyone gets a suit going, I’ll jump right in. After all, we haven’t agreed to the terms so we’re free to sue away.

  15. Hayati, the wobbly says:

    What sets this from other companie is is that valve cares more about the consumer. Sure, they may not be able to count to 3, but They listen to their community.

    • dolemite says:

      My only real complaint with them is lack of customer service. No way to contact them outside of help tickets, and they can take 2-3 days to answer one. Also, they provide no information. I once couldn’t log into my account. Weird…password was saved, but it wouldn’t log in. I contacted them. A few days later they finally responded. They said it appeared my account was hacked, reset it, and that was it. No explanation on how it was hacked or anything. I had no key logger or virus, and I never received an email about a password change. So… no clue how someone hacked my account, and no clue on how to prevent it in the future.

  16. zippy says:

    I’ve seen a lot of class action suits that are nothing more than legalized extortion. It’s easier and cheaper to settle than to fight it, the lawyers get rich, the lead plaintiffs get a bit of dosh, the class gets bupkis.

  17. jvanbrecht says:

    I see people bitch about binding arbitration replacements for class action suits all the time.. You know what, I sort of agree with valve, the only people who make anything out of them, are the lawyers, and companies usually end up settling without declaring or admitting any fault and pay the lawyers, customers get a $1 coupon off their next $60 game..

    What the agreement changes do not do, is remove the ability for you to sue them, you can still take them to court, just not as a class action suit.

    Now, don’t get me wrong, I thing class action suits do have their place.. the auto industry for example (no, not the Toyota unintended acceleration suits brought by people who cannot tell the difference between the brake and the accelerator). There is currently a class action lawsuit (either under way, or in the process of moving forward) related to the head bolts and design of the engine in my car, we are not looking for damages, or placing blame on anyone, we just want the company to replace the head bolts and fix any of the problems that occurred due to coolant leaking into the cylinder heads causing the engine to lock up (its around $30k to replace the engine). Its fine for those in warranty, however those not in warranty are screwed.

  18. HogwartsProfessor says:

    The problem with arbitration is that the company gets to choose the arbitrator. It’s rarely non-biased, which isn’t really fair.

  19. alstein says:

    The EULA still allows suing in small claims court, so it’s not AS bad.

    Still a scummy move from a company that was getting better this year.

    Alternatives to Steam that folks should look at:
    showmethegames.com
    Desura
    Gamersgate

    I don’t think any of these have mandatory binding arbitration.

    This wouldn’t be as big an issue if Steam didn’t have the ability to brick all your games (except for a few which can be run outside of Steamworks DRM)

  20. jesdynf says:

    I use Steam for one reason: I’ve got the technical acumen to not have to pay for games if I don’t choose to. If Steam steals something from me, there’s not going to be lawsuits and there’s not going to be binding arbitration — I will instead accept from them a license to never have to pay for a game for the rest of my life.

    Incidentally, their conceit that the first sale principle doesn’t apply to the goods that I’ve purchased from them is certainly novel, and when the day comes that I’m ready to liquidate the games I’ve purchased from them they probably won’t like the decisions I make.