In proceedings brought by the Australian Competition and
Consumer Commission (ACCC) in the Federal Court
(Court), US based technology company, Valve
Corporation (Valve), was found to be in breach of
the Australian Consumer Laws (ACL), in making
certain misleading representations to Australian consumers
regarding consumer guarantees.
Valve operates an online game distribution website, Steam, and
uses it to sell computer games to Australian consumers.
The Court found that the making of representations to Australian
consumers involved Valve engaging in conduct in Australia, and also
carrying on a business in Australia.
Therefore although Valve was a US based company, it was not
exempt and therefore subject to the ACL obligations as well.
Under the ACL, there are certain consumer guarantees that cannot
be modified in relation to goods and services, including, for
example, that the goods are of acceptable quality. If such
guarantees are modified or not included then consumers can exercise
their ACL rights to access remedies, including a refund for the
The representations to consumers made by Valve and the subject
of the Court proceedings were contained in the terms and conditions
of Valve's subscriber agreements and refund policies.
The representations included that consumers were not entitled to
refunds for games purchased through Valve's website, and there
were no guarantees or warranties from Valve that the goods were of
Valve's breach may involve fines in the millions of dollars
given that the maximum penalty for conduct of this nature is $1.1
million. The exact penalty is to be determined by the Court
at a later hearing date.
This case involved the Court extending the definition of
"goods" to include computer software, and it is likely
that the decision will have consequences for other foreign
companies selling goods online to Australian consumers.
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The Competition and Consumer Act strictly prohibits business conduct that is likely to, or will mislead or deceive consumers.
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