Valve has been found guilty of breaching Australian Consumer Law by the Australian Federal Court after 18 months fighting the charge against the Australian Competition and Consumer Commission (ACCC).
The issue in point was Valve’s lack of refund policy which was against Australian Consumer Law. The company has since implemented a refunds policy world wide after EA implemented a refund policy on its own digital store front, Origin.
The lawsuit came to light in August 2014, well ahead of Steam having any kind of refund policy in place so while it is good to have now, for Valve it was too late to use as a defense.
What Valve did instead was claim that it doesn’t officially conduct business in Australia and only admitted it provided an online access point to video games through a client, Steam. This service, according to their defense, did not fall into the definition of “goods” in Australian Consumer Law. It also highlighted the fact that the Steam Subscriber Agreement is the law of the State of Washington, USA and not the law of Australia.
The Australian Federal Court failed to agree with what Valve was claiming and instead found that misleading statements in the Terms and Conditions which focused on the rights of Australian consumers to a refund if they had been sold a faulty or defective product.
Justice Edelman concluded that Valve was doing business in Australia and therefore was bound to comply with Australian Consumer Law.
ACCC Chairman Rod Sims said
The Federal Court’s decision reinforces that foreign based businesses selling goods and/or services to Australian consumers can be subject to Australian Consumer Law obligations, including the consumer guarantees. In this case, Valve is a US company operating mainly outside Australia, but, in making representations to Australian consumers, the Federal Court has found that Valve engaged in conduct in Australia. It is also significant that the Court held that, in any case, based on the facts, Valve was carrying on business in Australia.
This is also the first time Courts have applied the extended definition of ‘goods’ to include “computer software” in the ACL. It will provide greater certainty where digital goods are supplied to consumers through online platforms. Consumer issues in the online marketplace are a priority for the ACCC and we will continue to take appropriate enforcement action to hold businesses accountable for breaches of the ACL.
No set amount was decided at the hearing in terms of liability. A hearing is set for the 15th April to discuss potential relief which may include up to 75% of the ACCC’s legal costs plus any decided liability.