Update: I haven’t used Steam since I wrote this article years ago, so things might have changed since then. I wouldn’t know. Therefore this article is preserved mostly for archival purposes.
There was one event yesterday that changed my view of Steam quite a lot. While it wasn't personal experience, research of mine made me rethink the actual strategy that content delivery systems (largest of which is Steam at the time the article was posted) use, and my trust in Steam has dropped significantly. So let me give you some details of that event and the research.
I'll start this by retelling what happened to one of my friends just yesterday. I won't mention names and such since they have no relevance to the article anyway. So this is what happened: he has a lot of games on Steam, and quite a lot of games outside of it as well. He had one game that came on a DVD installed, and decided to use the "Add non-Steam game" option of Steam to add it to the games list for easier access to all the games from one interface. He had done that before, too, this was after an OS reinstall. That part went well, but that's when all hell broke loose.
Some time after adding it, he received an e-mail from Valve stating that his copy of that game was illegal (an actual source was also mentioned, but my friends claims to have never seen that website anyway), and his account was suspended. Sure, it sounds like one of the unlucky times where a false-positive comes out. But this makes me wonder, about a few things.
First of all, that game is not on Steam. It's not even sold there. The only thing that was done is that a link to the game's executable was added to Steam. So what permission does Steam, and so Valve, have to tamper with executables of programs that aren't even a part of their own programme? Even more so that it was legal after all.
Secondly, there is no information about that anywhere. The Subscriber Agreement doesn't list any monitoring activities of Steam; actually, quite the opposite, since section 6 of it outright states "Valve does not screen Third Party Content available on Steam or through other sources." Does that mean that it does screen content from Valve itself, then? It seems so, since this additional layer of DRM is not mentioned anywhere.
Finally, that opens possibilities for viruses. What if someone creates a virus that emulates a pirated game and automatically adds it to Steam? It could boot any person out of Steam immediately.
Continuing the story, my friend then went to Valve's forum to try and explain that he has nothing to do with it. Guess what? His topic was locked with the same message that he got by e-mail. And since then, all his support tickets were ignored as well. It's not fair at all. Anyone should have at least an opportunity to appeal and point out false positives. Besides, if this cloaked anti-cheat of theirs has false positives, why did they include it in the first place? To ban more people for no reason?
At that point, since Steam had his account locked, he couldn't access any games from Steam at all. Again, it's not fair since he bought all of them. The subscriber agreement, section 13C2, states that "In the case of a one-time purchase of a product license (e.g., purchase of a single game) from Valve, Valve may choose to terminate or cancel your Subscription in its entirety or may terminate or cancel only a portion of the Subscription (e.g., access to the software via Steam) and Valve may, but is not obligated to, provide access (for a limited period of time) to the download of a stand-alone version of the software and content associated with such one-time purchase." That essentially means that they technically could, but don't have to refund the losses.
Finally, my friend posted in another forum, where he attracted enough attention so that a Valve representative came there and noted that. After that, he was given access to Steam back shortly. So all's well that ends well, but it's very lucky that this actually happened. What if his post was unnoticed there as well?..
Anyway, I decided to check out Steam's subscriber agreement more thoroughly and found quite a lot of rather frightening things there (I'm using Steam as well, so that does concern me). For example: Section 13B - "Valve reserves the right to collect fees, surcharges or costs incurred prior to the cancellation of your Account or a particular Subscription. In addition, you are responsible for any charges incurred to third-party vendors or content providers before your cancellation.In the event that your Account or a particular subscription is terminated or canceled by you, no refund, including any Subscription fees, will be granted. " As I understand that, it means that if you decide to cancel your subscription, not only will you not get a refund for everything you bought, but you may actually need to pay Valve for it! That would mean that it's not worth cancelling at all, better to reformat your disk and not install it any more.
Another example is from their Online Conduct. A part of it states: "You will not: Use any material or information, including images or photographs, via Steam in any manner that infringes any copyright, trademark, patent, trade secret, or other proprietary right of any party." That is directly linked to the incident I described earlier I believe. If I understand it correctly, this part means that not only you re not allowed to distribute anything (and as it says, anything at all - games, images, music, text files... And even if they are of no concern to Valve at all) that goes against copyright, but you can't even have it for personal use, as long as it's connected to Steam in any way; adding a link to it in Steam client seems to be sufficient, too. But that doesn't make much sense, either. If you were, for example, to create an artistic version of the Steam logo and add a link to it on Steam's client, they would have sufficient data to suspend your account as well. Not fair, and I think it might actually go against some local laws.
One more thing to note that is also listed on Wikipedia: "According to the Steam Subscriber Agreement, Steam's availability is not guaranteed and Valve is under no legal obligation to release an update disabling the authentication system in the event that Steam becomes permanently unavailable." Again, that means that you might lose money compared to buying an actual CD of your games.
Update: Here we go, Steam just demonstrated once again why it's suboptimal. As of the last update, many people are experiencing issues after buying Deus Ex: Human Revolution. It doesn't run after download, but that's not all. Some people can't open other games on Steam either! That shows a serious flaw in the system - since it adds a DRM layer, a malfunction in a single game affects every other game. Something like that would never happen on distribution systems that do not enforce DRM.
So all of that, along with Valve's $=€ equation, makes me quite worried. Of course, it probably won't effect most of the people. But it's still not fair. And here comes the funny part: Impulse, the competing content delivery system from Stardock, that also has most of the games that are available on Steam for sale, comes with a very similar license, where even wording seems to be pretty much exact; however, there is one major difference. All the unfair parts of the Steam subscriber agreement are simply not there. Or, even better, changed to fair versions of them. For instance, Section 9 of Stardock's Terms of Service: "Payment will be calculated on a per calendar quarter. Payments will be made 90 days after the end of the calendar quarter. (Example: First quarter ends March 31st. Payment for that quarter will be processed on June 30th). A total of $25.00 must be accumulated prior to funds being dispersed.
Payment per upload will be a 50/50 split of net revenue between you and Stardock. Net revenue is defined as gross revenue (sale price) minus customary charges. These charges could include, but are not limited to: credit card processing fees, bandwidth, store fees, ImpulseDriven subscriber discounts, etc.
If uploads are sold via a compilation CD or pack, 50% of the net revenue will be divided among the owners of the uploads based on the percentage worth of their upload. As an example, if there was a pack with three upload s, which sold for a net $20, and the 3 uploads were individually worth net $10, $6, and $4, the disbursement would be $10, $6, and $4 respectively." (this supplements Section 10 of the TOS, where it's stated that "At time of termination, account balance will be paid in accordance with section 9") So from what I can gather, it means that they will refund your games bought (by 50%) on either your account suspension or in case Impulse is terminated. There is no controversial "we might pay, we might not" here, it's all fair and square. Besides, compare even the language - Steam's Subscriber agreement is a lot more technical and hard to understand, while here you can even see examples for increased clarification.
Now let's remember what we know about Stardock and it's DRM approach. If you're not aware, Stardock hates any form of DRM and, since pirates are not their customers to begin with, they don't influence sales and their products even sell better without DRM since people don't have to go through all the hassle of it. Impulse is also based on that, it doesn't go against users, but instead helps them. You don't have to wait for it to verify that you're really who you claim to be before launching any game like Steam. You aren't forced to apply patches as Steam does. It doesn't have invasive advertisements like Steam. And even if you do get problems, Stardock is famous for customer support and always listens to them. There are also a lot of additions, such as free patching of games you didn't even buy on Impulse, archiving and backup of games etc.
Now you might say - wait, Steam is still known for their low prices. Well, it appears not! I compared UT3 on Steam and Impulse as well as UT2004 on Steam, Impulse and Good Old Games. Steam sells UT3 for 20 Euros at the time of speaking. You can get it for 9 on Impulse - that's less than half the price! I got UT3 exactly during a deal week, and IIRC it was 10 back then. So even deals only make the prices match, they don't make them lower! As for UT2004, it's 15€ on Steam, 7€ on Impulse and 8€ on GOG. See the trend? I do.
In conclusion, I'm rather worried about Steam and Valve's general philosophy about it. It's very invasive and many times not fair. I'm quite happy that I have only one game on Steam, UT3, so I'm not very dependent on it. But for those who do have a lot of games there, I'd reconsider it, even if the chache of you getting something negative out of it is low. Personally I'll try to stay away from Steam as much as possible, given that Impulse is in every single way better than Steam (too bad there are no more alternatives from what I've found, although I'm happy with Impulse right now).
Trivia about Impulse: I see quite a lot of references to Steam here. For one, their website is http://www.impulsedriven.com/ whereas Steam website is named http://www.steampowered.com/. Also, steam is usually associated with steam engines that are used to drive a vehicle; impulse is a type of theoretical spacecraft propulsion that is slightly slower than light. The analogy also makes sense since Steam is made by Valve (they are connected through mechanics and pipes) while Impulse is made by Stardock (they are connected through space and sci-fi).
Update: Impulse has been acquired by GameStop, and they changed the terms of service as well. Unfortunately, it is now a carbon copy of Steam's - they now reserve the right to kill your account without notice and do not guarantee that the games will run on your PC or the service is adequate to begin with! They also reserve the right to install third party software here now. However, it's still a pretty good distribution system, since it does not enforce DRM and still has a very good return policy, not to mention that they offer a free patching service. Nevertheless, in my books, Impulse has dropped below GOG.com and physical media, even though higher than things like Direct2Drive and a whole lot higher than Steam.
Also, Stardock representatives said that I was reading too much into the old ToS, since they in fact did not guarantee a refund in case they went down earlier either. That's too bad...