Millions of Steam users woke up this morning to an announcement from Valve: the multifaceted gaming company has updated its Steam Subscriber Agreement, removing the requirement that disputes be taken to arbitration rather than to court. Currently, if you have a dispute, you must go to federal or state court in King County, Washington.
Legal experts consider this a victory for Steam users, even if most of them will probably never take Valve to court. Such agreements typically require consumers to arbitrate rather than sue – at least in the United States. Previously, Valve forced its disputes into arbitration – where a third party reviews the problem to resolve it outside the legal system. The update also removed Valve’s class action waiver, meaning class action lawsuits filed by a group of people filing the same complaint are now being considered.
“We have eliminated the requirement to resolve disputes through individual arbitration,” Valve wrote in a press note. “As always, we encourage you to contact Steam Support if you are having any issues, as this will almost always be the best way to find a solution. However, if that doesn’t work, the updated USSA now states that any disputes will be resolved in court rather than through arbitration. We have also removed the class action waiver and cost-shifting and fee-shifting provisions that were included in previous versions of the SSA.”
Earlier this year, arbitration made news after Jeffrey Piccolo sued Disney and its on-site restaurant following the death of his wife; she died from an allergic reaction after dinner, even though she told the restaurant about her dairy and nut allergies. Disney responded to the lawsuit, arguing that Piccolo “waived his right to sue when he registered 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 backed downallowing the case to continue in court.
Valve’s decision to remove the arbitration clause is noteworthy because most service contracts include an arbitration clause. (However, Ira Steinberg, a partner at Greenberg Glusker Litigation Group, told Polygon that there is now a “tendency for companies to reconsider arbitration.”)
Supreme Court decision of 1995 expanded the Federal Arbitration Actwhich was originally intended to ensure compliance with voluntary arbitration agreements between businesses, including consumer-business contracts. Supreme Court continues to support consumer and business arbitration in the following decades, making it almost guaranteed for most contracts. The problem with arbitration – reports the Institute of Economic Policyis that people must take their issues to “a privatized, invisible and often inferior forum where they have less chance of winning.” Typically, consumers also have no right to appeal arbitration decisions. Arbitration processes vary, but are usually decided by an external arbitrator or tribunal. Cases sent straight to arbitration are private in nature, which also makes them preferable to companies.
Bottom line: Steam users can now sue Valve, including through class action lawsuits
Critics of arbitration say it is fairer to allow consumers to take a company to court, which creates a level and limpid playing field overseen by government officials such as judges rather than private parties. In its update, Valve also removed the class action waiver that previously prevented players from filing class action lawsuits.
Bottom line: Steam users can now sue Valve, including through class action lawsuits.
So why would Valve do this? This may be a response to an attempt by several law firms to initiate “mass arbitration” in which “hundreds or thousands of consumers bringing individual arbitration claims against the same company at the same time and in the same case,” according to ClassAction.org. This is essentially a loophole for class action waivers and arbitration clauses, although it still won’t end up in court. ClassAction.org, a class action website, called it a “relatively recent” way of approaching corporations in consumer disputes. Several law firms used this option, one of whom was sued by Valve for allegedly trying to “extort” the company with the threat of mass arbitration with over 50,000 people. (That lawsuit was dismissed without prejudice in August, meaning Valve can file again.)
The idea is that the sheer number of arbitration cases would force Valve to settle everyone with the same resolution, rather than arbitrating them individually. Arbitration is usually less expensive than court proceedings, but on such a massive scale it can easily become overwhelming for the company with which the dispute is ongoing. “In states like California, where companies must pay most arbitration fees in connection with a consumer claim, the company would be required to pay a filing fee for each individual plaintiff,” Steinberg said. “With fees around $1,500 per claim, a claim involving thousands of people can cost millions in filing fees.”
Valve has not explained why it is making this change. Polygon has reached out to the company for comment.
