Valve loses appeal against AU$3 million penalty for misleading consumers about refunds

Valve has lost its latest appeal against an $3 million AUD ($2.3m USD) penalty imposed on it in 2016. In 2014, the Australian Competition and Consumer Commission (ACCC) went after the Seattle-based gaming giant alleging that it had misled, deceived, and refused to provide refunds to Australian consumers, when it was legally obliged to do so.

The ACCC filed its case before Valve introduced an automated refunds system in 2015.

In 2016, the Federal Court of Australia found the company guilty, and later slapped it with the aforementioned penalty. Valve appealed against that decision, but the High Court of Australia has now ruled that the judgment stands; Valve must pay the penalty. In a statement, the ACCC says that this “is the final decision on this issue.”

Valve argued in its defense that as it is a company established in the Washington state of the United States of America and did not have any employees or other presence in Australia, it wasn’t liable under the Australian Consumer Law.

However, the court noted that Valve’s lack of a physical premises or employees within the country was irrelevant as it had an ongoing “business presence” with an estimated 2.2 million consumers in the country and owned significant infrastructure to deliver games to those consumers while incurring huge costs to do so.

Valve also argued that the consumer protections offered by the Australian Consumer Law did not apply to games offered via Steam as the Steam Subscriber Agreement was, once again, governed by Washington state law. The court rejected that ground of appeal.

In a statement, ACCC Commissioner Sarah Court said:

“This important precedent confirms the ACCC’s view that overseas-based companies selling to Australian consumers must abide by our laws. If customers buy a product online that is faulty, they are entitled to the same right to a repair, replacement or refund as if they’d walked in to a store.”

Valve also argued that the penalties imposed on it were excessive, to which the court noted that the company had done “relatively little” to train its staff with regards to Australian legalities.

In 2016, after the initial judgment, the ACCC had handed a notice to Valve asking what actions it had taken to inform its staff of Australian consumer rights, to which the company responded that it had issued oral instructions regarding compliance. In its procedure, the court expressed concerns regarding the lack of a written guidance to Valve’s staff, which the company defended noting that “they’re a pretty efficient bunch.”

As the four-year legal battle comes to an end, it seems that Valve now must comply and pay its dues. In addition to the $3 million AUD penalty, the company must also place a notice in font size 14 on its Australian website informing consumers of their rights.

Source: ACCC, The Sydney Morning Herald, Davies Collison Cave (PDF) via Rock Paper Shotgun
Australia flag waving on the wind image via Shutterstock

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