The consumer watchdog has successfully prosecuted a
US computer software company for misleading consumers in Australia.
The case has big ramifications for overseas companies supplying
Valve is an online game distribution network that operates from
Washington State. It allows users to download computer games
through subscription to its "Steam" platform. That might
not mean much to the non-techies out there, but with over 125
million users of Steam worldwide, and an annual revenue of over $3
billion, Valve is kind of a big deal.
The ACCC brought proceedings against Valve, claiming that it had
made misleading representations about the availability of refunds
and the application of statutory guarantees imposed by the
Australian Consumer Law (ACL). One of the primary issues in this
case was whether the ACL applied to Valve's conduct even though
it was a foreign company without an Australian office. For that to
happen, the ACCC had to show that either Valve's conduct
actually occurred in Australia or that Valve, as a foreign
corporation, was carrying on a business in Australia. The Court
found the former because (among other things):
Valve has 3 servers in Australia that receive content and are
worth $1.2 million;
Valve has 2.2 million subscribers in Australia to whom it
provides support; and
Valve made payments to an Australian company for expenses
relating to the servers.
Interestingly, with similar reasoning, the Court also determined
that had Valve's conduct not been in Australia, Valve still
would have been caught by the ACL for carrying on a business
And yada yada yada, the Court found Valve to be in breach of the
A lot of foreign companies who deal with Australian consumers
ignore the ACL. The moral of this story is you can run but you
can't hide. If you're a foreign company dealing with
Australian consumers, get advice on whether the ACL applies.
We do not disclaim anything about this article. We're
quite proud of it really.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Businesses should ensure that any promotions do not cross a 'fine line' between acceptable and misleading or deceptive.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).