For years, the US video game company Valve has refused to provide refunds for games purchased on Steam, even if the products were found to be unfit for purpose. Today, the Australian Federal Court finally ruled that Valve was in breach of Australian Consumer Law; something that was obvious to pretty much everyone. Here's what the verdict means for Steam purchases.
The Federal Court found Valve guilty of engaging in "misleading or deceptive conduct" and making "false or misleading representations to Australian consumers" on its online game distribution platform Steam. The gaming juggernaut broke consumer guarantees under Australian Consumer Law; specifically its lack of remedy for goods that are not of acceptable quality or fit for the purpose for which they were sold.
The Court found that Valve made the following false or misleading representations to consumers, in the terms and conditions contained in three versions of its Steam Subscriber Agreement and two versions of its Steam Refund Policy:
- consumers were not entitled to a refund for digitally downloaded games purchased from Valve via the Steam website or Steam Client (in any circumstances);
- Valve had excluded statutory guarantees and/or warranties that goods would be of acceptable quality;
- Valve had restricted or modified statutory guarantees and/or warranties of acceptable quality.
The case was initially brought forward by the ACCC over a year ago. Valve initially attempted to defend its lack of a refund policy by claiming it conducts no "official" business in Australia. But this is plainly false. By making its online sales portal available to Australians, Valve was clearly carrying on business in Australia.
“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," ACCC Chairman Rod Sims explained.
"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."
So what does this mean for Australian Steam customers? Not a whole lot, actually. Last year, Valve quietly tweaked its refund policy to comply with Australian consumer law while the court case was still in full swing. But if you unsuccessfully applied for a refund prior to June 2015, you might want to give it another shot.
The court decision also has wider ramifications for overseas software companies operating in Australia. As Rod Sims explains:
“This is the first time Courts have applied the extended definition of ‘goods’ to include “computer software” in the ACL. It will provide greater certainty where digital goods are supplied to consumers through online platforms.”
According to the ACCC, Steam has over 125 million users worldwide — with approximately 2.2 million of those users being Australian consumers. In 2015, Valve’s revenue was reported at over $3 billion. In other words, it can definitely afford to refund your crappy copy of Batman: Arkham Knight.