On Thursday, Apple filed a joint discovery letter brief with non-party Valve Corporation regarding its November subpoena of Valve in relation to Epic Games’ suit against Apple. The subpoena demanded that Valve Corporation provide extensive sales data for 436 games.
This move comes during Apple’s legal battle with Fortnite game developer Epic, which began in August over Apple’s App Store policies. Apple was accused of antitrust violations for its purported anticompetitive restraints and monopolistic practices, specifically, its 30% tax on the sale of every app and every digital in-app purchase.
According to the joint letter, “Epic’s various mobile and non-mobile distribution options are central to disputed issues of market definition and market power.” The letter noted that “Valve’s digital distribution service, Steam, is the dominant digital game distributor on the PC platform and is a direct competitor to the Epic Game Store.” Thus, Epic Games “could distribute Fortnite on Apple’s App Store, the Epic Games Store, Valve’s Steam, or through various other digital distribution channels.” Apple contends that despite its meeting with Valve, Valve has “refused to produce information” related to some of Apple’s requests, specifically Request 2 and 32.
Request 2 asks for documents “sufficient to show Valve’s: (a) total yearly sales of apps and in-app products; (b) annual advertising revenues from Steam; (c) annual sales of external products attributable to Steam; (d) annual revenues from Steam; and (e) annual earnings (whether gross or net) from Steam.” Reportedly, Apple wants this information to “calculate(e) the total size of the market for Epic’s available digital distribution channel.” Apple notes that courts have asked Samsung to provide “almost identical” information. However, this data is also highly valuable because it could allow for the assessment of the games and apps marketplace, in which both parties compete.
Request 32 asks for documents “sufficient to show: (a) the name of each App on Steam; (b) the date range when the App was available on Steam; and (c) the price of the App and any in-app product available on Steam.” Again, Apple asserts that this is “basic information relating to the identity and availability of games over time on Steam, is necessary to determine the scope and breadth of the digital distribution marketplace, and is ‘relevant to showing competition’ between these platforms.”
Meanwhile, Valve averred that Apple’s demands are extraordinary and broad. Valve adds that it has already shared documents about its “revenue share, competition with Epic, Steam distribution contracts, and other documents.” However, Valve asserts that “Apple was not satisfied” with this. Specifically, Valve states that “Apple gave Valve a list of 436 video games it says are available on the Epic Games Store and Steam, and (a) demanded Valve identify, from 2015 to the present, every version and all digital content or items for each of these games on Steam, then (b) provide exhaustive information about all of them,” including dates on sale, price, price change, gross revenues “for each game version and item, broken down individually,” and “(a)ll of Valve’s revenue related to these versions, content and items.” Furthermore, Valve proffers that Apple’s requests would “impose an extraordinary burden on Valve to query, process and combine a massive amount of to create the documents Apple seeks – materials that Valve does not create or keep in the ordinary course of business.”
The filing notes that Apple narrowed the request from all 30,000+ games on Steam over 10 years to these 436 games over six years. Valve argued that Apple has not shown substantial need for the information it requested and that much of the information that Apple requested comes from third-party games, but Apple has taken a “shortcut” via its subpoena. Additionally, Valve argues that it properly redacted confidential third-party and other confidential information from the documents that it did provide to Apple.
Apple asked the court to order Valve to provide the information requested in Request 2 and 32 and to provide unredacted copies of the small number of documents that Valve did provide. Valve also contests the order.
Apple is represented by McDermott Will & Emery. Valve Corporation is represented by Fox Rothschild.
