Valve Found Guilty by Australian Federal Court

Published: March 29, 2016 8:00 AM /


Steam Logo

Australian courts have found Valve Corporation, owners of game distribution platform Steam, guilty of "misleading or deceptive conduct" under ACL (Australian Consumer Law) in a lawsuit filed by the ACCC (Australian Competition and Consumer Commission), due largely to its exclusion of liability in regards to the quality of their products and lack of refund policy. Valve's legal woes in Australia began in August 2014, preceding the policies that have since been implemented to facilitate the refund of games purchased through Steam, with certain limitations. This came as a sudden change to their long-standing "no refunds" policy, very likely in effort to comply with European Union and Australian legislation following multiple impending battles with consumer advocates in many countries. While Australia is among many countries that have attempted to sue Valve due to so-called "deceptive" consumer practices, their win comes as a surprise particularly after German consumer group Verbraucherzentrale Bundesverband failed twice in similar attempts to sue the company.

Valve's defense came primarily from a refusal to admit that it conducted business in Australia despite Steam's availability to Australian Consumers. A further attempt was made to distance themselves from ACL's protective measures by suggesting it provided "services" rather than "goods", invalidating clause 2(1) of the Australian Consumer Law, thus "consumer guarantee of acceptable quality in s 54 does not apply." However, Justice Edelman's conclusion was that representations made by the "Steam Subscriber Agreement" involved conduct in Australia, which in turn represented business executed within Australia.

ACCC Chairman Rod Sims clarifies further:

"The Federal Court’s decision reinforces that foreign based businesses selling goods and/or services to Australian consumers can be subject to Australian Consumer Law obligations, including the consumer guarantees.

In this case, Valve is a US company operating mainly outside Australia, but, in making representations to Australian consumers, the Federal Court has found that Valve engaged in conduct in Australia.

It is also significant that the Court held that, in any case, based on the facts, Valve was carrying on business in Australia."

Also of significance, the case serves as a landmark by extending the definition and protections of the term "goods" to computer software under the ACL, providing "greater certainty where digital goods are supplied to consumers through online platforms." It remains to be seen whether Valve's loss in this case could set precedent for future precedings, such as ongoing lawsuit by French watchdog group UFC-Que Choisir.

The ramifications of Valve's loss will be expanded upon in a relief hearing scheduled for an as-yet unnannounced date.  The continued lack of support for AUD as currency through Steam after its change in policies may come to some resolution following the trial wrap-up, though it's still largely unknown how much this case has had an impact on Valve's willingness to support the Australian Dollar.

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