With intellectual property there is at least (by default) a direct link between the work necessary to create an item and its ownership. With physical items the initial ownership is necessarily predicated on having controlled a means of production.
I can create an IP and I do not need to spend hundreds of thousands or millions of dollars to do so. But I cannot create a substantial physical item without paying the people who own the materials and the factories for the privilege of doing so. Why is previous ownership such a critical factor in ownership of new items, separate from the work to create them?
Intellectual property laws have their own issues but at least with regard to them conceptually, intellectual property is more “pure” than physical property.
Totally solid option for some people, but not everyone. Depends on the game (some can’t be judged in two hours), your available time (can’t refund a game you bought a year ago that you only just now played), etc., and limits you to buying only from Steam. What if you’d rather buy from GOG or Humble Bundle?
It isn’t. If it were, that would mean that in practice, board members act to maximize shareholder value because they are legally obligated to do so, and that simply isn’t true.
In practice, board members and C-suite employees are incentivized to maximize shareholder value. They are not legally obligated to do so.
Fiduciary duty is a legal requirement, meaning that if you don’t fulfill your fiduciary duty, you’re liable. But nobody has been successfully sued for not maximizing shareholder value when their actions were in line with the business judgment rule (“made (1) in good faith, (2) with the care that a reasonably prudent person would use, and (3) with the reasonable belief that the director is acting in the best interests of the corporation”). Successful lawsuits regarding breach of fiduciary duty (in the context of corporate law) require the defendant to have acted with gross negligence, in bad faith, or to have had an undisclosed conflict of interest.
The closest instance of legal precedent that I know of (aside from “” of course) that eBay v. Newmark (Craigslist), which Max Kennerly took as meaning that corporations . In this case, Craigslist was found to have violated their fiduciary duties to eBay because Craigslist, in Max’s words, “tried to protect the frugal, community-centric corporate culture that was a hallmark for their success.”
Except, if you actually read the case notes, it’s clear that the issue wasn’t that Craigslist wasn’t maximizing their profits, but that they were diluting the percentage of stocked owned and flexibility of selling those stocks of other stockholders. The issue wasn’t that Craigslist wanted to spend half their profits supporting charities or anything like that - no, it was that they were trying to artificially limit, thus directly devaluing, the shares they had already sold. In other words, I agree that this was a case about minority shareholder oppression as opposed to being an edict to maximize profits / shareholder value.
And other than people threatening legal action, the most recent case we have (other than eBay v. NewMark) in favor of shareholder primacy is 124 years old - Dodge v. Ford. But the opposite is true:
Shareholder primacy is clearly unenforceable on its own term because the business judgment rule would defeat any claims based on a failure to maximize profit. 40 Corporate managers formulate business strategy. A rule‒sanction is antithetical to the core concept of the business judgment rule. In over one hundred years of corporate law, there is not a case where a state supreme court imposed liability for breach of fiduciary duty on the specific ground that the board, in managing operational matters, failed to maximize shareholder profit, though it made the decision informedly, disinterestedly, and in good faith.41 That case does not exist. In fact, many cases show just the opposite. Courts have held that shareholders cannot challenge a board’s decision on the specific grounds that, for example: the company paid its employees too much; 42 it failed to pursue a profit opportunity;43 it did not maximize the settlement amount in a negotiation;44 it failed to lawfully avoid taxes.45 There are classic textbook cases where courts have rejected attempts of shareholders to interfere with the board’s decisions on the argument that their views of business or strategy would have maximized shareholder value.46
The belief that a corporation is legally obligated to maximize shareholder value isn’t just wrong; it also:
Implies that no other model is feasible
Removes accountability for the negative effects of such policy from the people who are responsible for perpetuating them
Reinforces the fallacy that this should be resolved through legislation
Steam’s “price parity rule” is a policy that ensures that Steam keys cannot be sold on other sites unless the product is also available for purchase on Steam at no higher a price than is offered on any other service or website.
IMO, it’s reasonable to say “If you want to sell Steam keys off Steam, you need to follow our pricing rules,” but it is not reasonable to say “If you want to sell your game, sans keys, off Steam, you have to follow our pricing rules to keep selling on Steam.” You’re talking about the former here, right? Or does that mean that the following situation is prohibited:
Your game is listed at $50 on Steam
You sell keys from your own site for $50
You sell your game directly from your site for $40
and if so, that the mitigation is to either stop selling Steam keys entirely or to raise the price on your own site to $50?
That’s somewhere in between the two but I dislike it. I suspect it’s more legally murky, too, like tied selling.
The article briefly talks about the latter (emphasis mine):
Wolfire’s David Rosen expanded on that accusation in a recent blog post, saying that Valve threatened to “remove [Wolfire’s game] Overgrowth from Steam if I allowed it to be sold at a lower price anywhere, even from my own website, without Steam keys and without Steam’s DRM.”
However, it also says “Sources close to Valve suggested to Ars that this ‘parity’ rule only applies to the ‘free’ Steam keys publishers can sell on other storefronts and not to Steam-free versions of those games sold on competing platforms. Valve hasn’t responded to a request for comment on this story.” I wonder if the lack of comment was because of Wolfire’s lawsuit?
I’m also now curious if the reason for Steam saying that was related to the in-between situation I talked about above.
@Kecessa shared this ArsTechnica article from 2022 that covers an update on that lawsuit - I haven’t seen anything more recent. In it, Wolfire makes the same claim, in court, that they’d already made in their blog post, which was sufficient to convince the judge to re-open their case.
The ruling [to re-open the case] makes particular note of “a Steam account manager [who] informed Plaintiff Wolfire that ‘it would delist any games available for sale at a lower price elsewhere, whether or not using Steam keys [emphasis in original complaint].’” The amended suit also alleges that “this experience is not unique to Wolfire,” which could factor into the developer’s proposed class-action complaint.
Yes, that’s much more credible - thank you for sharing that. This part in particular is concerning:
The ruling makes particular note of “a Steam account manager [who] informed Plaintiff Wolfire that ‘it would delist any games available for sale at a lower price elsewhere, whether or not using Steam keys [emphasis in original complaint].’” The amended suit also alleges that “this experience is not unique to Wolfire,” which could factor into the developer’s proposed class-action complaint.
I wasn’t able to find any instances of Steam actually de-listing a game because it was listed cheaper elsewhere, but a credible threat to do so is almost as bad (possibly worse, really, since such a threat hints that Steam might have used other underhanded tactics when dealing with game devs). I wasn’t able to find any more recent news on the case, but hopefully we’ll learn if the issue was that particular Account Manager + lack of oversight or something more.
“People like me” meaning “People who cite their sources and investigating claims before making them?” Yes, I can understand why you might find it difficult to convince “people like me” to believe something that’s trivially shown to be false.
I said this elsewhere but that’s not true. The idea that publicly traded companies have a duty to maximize shareholder value is a myth, and anyone privileged enough to sit on a board of directors likely knows this. See this article for an explanation. Every time a board squeezes a company for short term profits at the cost of long term good will, long term profits, etc., that is because they chose to do so.
The idea that publicly traded companies have a duty to maximize shareholder value is a myth, and anyone privileged enough to sit on a board of directors likely knows this. See this article for an explanation. Every time a board squeezes a company for short term profits at the cost of long term good will, long term profits, etc., that is because they chose to do so.
EDIT: See also This NY Times article. And note that I’m not saying that corporations, board members, etc., aren’t pressured or incentivized to maximize shareholder value - I’m saying that they do not have a legal duty to do so.