The Full Court of the Federal Court of Australia has today dismissed an appeal by Valve Corporation (Valve) against a ruling that it engaged in misleading or deceptive conduct and made false or misleading representations about consumer guarantees. Valve’s appeal against a $3 million penalty was also dismissed.
Valve is one of the world’s largest online video game retailers and operates the Steam distribution platform. In 2016, the Federal Court ruled that the Australian Consumer Law (ACL) applied to the company, which is based in the United States, and ordered Valve to pay a $3 million penalty.
“The Full Court found Valve carried on business in Australia, and was therefore bound by the Australian Consumer Law in its dealings with customers here,” ACCC Chairman Rod Sims said.
“The Full Court also upheld the finding that Valve made misleading representations about consumer guarantees and that certain terms and conditions in the Steam subscriber agreements and refund policies were false or misleading.”
“This case sets an important precedent that overseas-based companies that sell to Australians must abide by our law. All goods come with automatic consumer guarantees that they are of acceptable quality and fit for the purpose for which they were sold, even if the business is based overseas,” Mr Sims said.
The ACCC’s cross appeal was dismissed in relation to representations made by Valve in online chats to individual consumers. The trial judge had previously found that these representations were not misleading, in part because the consumers had asserted their ACL rights, and were therefore not likely to be misled.
Background
Valve Corporation is based in Washington State and operates the Steam game distribution platform. Valve has 2.2 million Australian subscriber accounts on its Steam platform.
The ACCC commenced legal action against Valve in August 2014. In 2016, the Federal Court found that Valve had engaged in misleading or deceptive conduct and made false or misleading representations. In 2016, the Court ordered Valve to pay penalties totalling $3 million.