Video game purveyor Valve, has been dragged into Apple’s ongoing legal battle with Epic Games and the firm was none too pleased about that.
This is according to a joint discovery letter filed by Apple and Valve. Back in November 2020, Valve was subpoenaed by Apple because Apple believes that testimony from Valve can assist in the case against Epic Games.
Apple is trying to determine the size of the market Epic Games has to play in, but in order to do that it needed data from Valve including:
- Total yearly sales of apps and in-app products;
- Annual advertising revenues from Steam;
- Annual sales of external products attributable to Steam;
- Annual revenues from Steam; and
- Annual earnings (whether gross or net) from Steam.
In addition to the above, Apple has also demanded:
- The name of each App on Steam;
- The date range when the App was available on Steam;
- The price of the App and any in-app product available on Steam.
Further to all of this, while Valve did respond to the subpoena in part, those responses are so heavily redacted “Apple cannot discern what information they might contain”.
But Valve continues to evade provision of the information outlined above because, well it’s a lot of work.
That’s simplifying the argument but several times in the joint discovery letter Valve highlights how Apple’s demands would require significant effort and cost.
For instance, Apple is demanding six years worth of PC game and item sales for hundreds of third party video games and confidential data about revenue from those sales as well as Valve’s revenue. Worse, Valve claims Apple is demanding this without covering Valve’s costs nor an offer to do so.
While Apple argues its requests for information are narrow, Valve’s summation of the data the Cupertino firm is demanding per title on the store is anything but.
This information includes:
- Identifying all versions and items on Steam since 2015 for all 436 games on Apple’s list
would require Valve to review and query years of sales listing data. Apple could use
public information on Steam to complete this task itself, but wants Valve to do it;
- Determining the sales prices for each game version and item at specific times would
require Valve to query at least two separate databases—one that stores base prices and
another that keeps discount information—then merge that data;
- Valve would need to pull unit sales information from a third database and payment rules
from yet another database, then collate that information as well;
- For any game or item sold as part of a package (as many are), Valve would need to query
yet another source for the allocation rules used to allocate that specific package price
among its components, then apply those rules to other queried data;
- Return information must also be queried and the compiled data adjusted for returns; then
- Valve would need to query and separate out revenue share information to determine its
revenues related to each sale.
Now, this information may be to hand if Valve were a publicly traded company, but it’s not.
Despite operating one of the biggest PC gaming platforms the world over, Valve is a private company with 350 employees, something it had to remind Apple about in the letter.
“Apple argues it is fair to make Valve do all this work and incur this disruption because
Samsung—a public company that competes in the mobile app market—produced something
similar. Public companies like Samsung must keep detailed financial and operational
information. Valve is a privately held company with no outside shareholders or lenders, and not
subject to public regulatory reporting and auditing requirements. Valve does not in the ordinary
course of business keep the information Apple seeks for a simple reason: Valve doesn’t need it,” the firm said.
But it’s the end of the letter that really is, spicy, as the kids would say.
“Somehow, in a dispute over mobile apps, a maker of PC games that does not compete in the
mobile market or sell ‘apps’ is being portrayed as a key figure. It’s not. The extensive and
highly confidential information Apple demands about a subset of the PC games available on
Steam does not show the size or parameters of the relevant market and would be massively
burdensome to pull together. Apple’s demands for further production should be rejected,” Valve concluded.
Valve and Epic Games are not mates in the world of PC gaming sales but Newell and co. clearly aren’t willing to bend the knee for Apple simply because a competitor is involved.
Further to this, Valve should be commended for protecting third parties on its platform. Whether that defence is a result of laziness might be up for debate, but we’re giving Valve this win by default.
Whether a judge will force Valve to comply is unknown but, Valve’s argument is rather strong, especially as it doesn’t deal in mobile gaming and, as is worth remembering, this is about Epic Games and Fortnite on Apple iOS.
[Via – PC Gamer]