In late December 2016, the Federal Court gifted Valve
Corporation an unwanted Christmas present by imposing a $3 million
penalty for misrepresenting consumer refund rights. The order
brings an end to the ACCC's proceedings against the online
gaming giant, which began in August 2014.
The litigation related to Valve's online gaming platform
Steam. In March 2016 the Court found that Steam had contravened the
Australian Consumer Law (ACL) by misleadingly representing that the
company had no obligation to offer a refund for games downloaded
through the platform and purporting to exclude statutory guarantees
and warranties of acceptable quality.
Several factors were considered in imposing the $3 million
penalty sought by the ACCC, notably:
the size and revenue of Valve and the need for deterrence;
the consumer loss and Valve's profit arising from the
Valve's culture of non-compliance; and
Valve's limited cooperation with the ACCC.
Valve submitted that a penalty of $250,000 was appropriate,
which Justice Edelman rejected as 'not even the real cost of
doing business'. While he noted a large company should not be
made to pay a greater penalty purely because of its size, the need
for specific deterrence for Valve had to be considered.
His Honour noted that, while it was impossible to conclude how
many consumers suffered loss or the amount of profit involved, the
misrepresentations contributed significantly to Valve's profit
making processes. His Honour found the misrepresentations were
unlikely to induce purchases but would deter customers from seeking
a refund, or deny those who did.
Furthermore, his Honour described Valve's culture of
compliance as very poor. The company had no written compliance
policy and had formed its view about the applicability of
Australian law without obtaining legal advice.
The decision is a reminder that, in determining penalties,
courts will examine the conduct of the respondent throughout ACCC
investigations and litigation, with Justice Edelman remarking that
Valve was only entitled to a minor discount because it
'contested liability on almost every imaginable point',
cooperated minimally with the ACCC and remained resolute that it
was not liable despite judgment against it.
Alongside the $3 million penalty, Valve was also required to
establish and implement an ACL compliance program and publish
consumer rights information on its website for twelve months.
Cooper Grace Ward is a leading Australian law firm based in
This publication is for information only and is not legal
advice. You should obtain advice that is specific to your
circumstances and not rely on this publication as legal advice. If
there are any issues you would like us to advise you on arising
from this publication, please contact Cooper Grace Ward
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