Not even “Steam” can hide from foreign Consumer Guarantees!

March 31, 2016 Published by

In Australia we have statutory guarantees for consumers under the Australian Consumer Law (ACL) (Consumer Guarantees). These are designed to protect Australian consumers from being sold goods or services which are not of acceptable quality or are not fit for the purpose for which they were sold. Under the ACL, consumers are entitled to a refund, repair or replacement in certain circumstances if the goods or services purchased do not meet the requirements noted above.

Generally Consumer Guarantees are only applicable if:

  1. Persons are carrying on business within Australia or bodies corporate incorporated or registered in Australia; and
  2. The goods or services sold are under $40,000 or if over $40,000 the goods or services must be for personal or household use

Valve Corporation (Valve) is an entertainment software and technology company located in the United States of America, which operates an online computer game distribution platform known as ‘Steam’.

Steam is used by over 125 million people worldwide and approximately 2.2 million of those users are Australian consumers.

Valve does not have a physical retail store in Australia, but instead sells digital downloads of its games via its website Steam.

Despite not having a physical presence in Australia, Valve has been found to have engaged in misleading and deceptive conduct under the ACL.

In proceedings brought by the Australian Competition and Consumer Commission, the Federal Court of Australia held that Valve made the following false or misleading representations to consumers in Steam’s terms and conditions and refund policy:

  1. Valve did not allow consumers the right to a refund for digitally downloaded games purchased from Valve via the Steam website or Steam Client (in any circumstances);
  2. Valve had excluded statutory guarantees and/or warranties that goods would be of acceptable quality; and
  3. Valve had restricted or modified statutory guarantees and/or warranties of acceptable quality.

Based on the facts, the Court considered Valve to be carrying on business in Australia and so even though Valve is a foreign company selling digital products it must still comply with the ACL.

This decision is also the first time that the Court has extended the definition of ‘goods’ to include digital goods in the ACL.

To find out more about Consumer Guarantees see here.

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