Valve to pay $3 million in penalties for misrepresenting gamers' consumer guarantee rights

3 January 2017

On 23 December 2016 the Federal Court ordered Valve Corporation (Valve) to pay penalties totalling $3 million for breaching the Australian Consumer Law. Valve is one of the world’s largest online game retailers and operates the Steam game distribution platform. 

In March 2016, the Court found that Valve had breached the Australian Consumer Law by making false or misleading representations to consumers in relation to its online gaming platform, Steam.

The Court held that the terms and conditions in the Steam subscriber agreements, and Steam’s refund policies, included false or misleading representations about consumers’ rights to obtain a refund for games if they were not of acceptable quality.

In determining the appropriate penalty to impose on Valve, Justice Edelman noted that “even if a very small percentage of Valve’s consumers had read the misrepresentations then this might have involved hundreds, possibly thousands, of consumers being affected”.

Justice Edelman also took into account “Valve’s culture of compliance [which] was, and is, very poor”. Valve’s evidence was ‘disturbing’ to the Court because Valve ‘formed a view …that it was not subject to Australian law…and with the view that even if advice had been obtained that Valve was required to comply with the Australian law the advice might have been ignored”. He also noted that Valve had ‘contested liability on almost every imaginable point’.

“These proceedings, and the significant penalties imposed, should send a strong message to all online traders operating overseas that they must comply with the Australian Consumer Law when they sell to Australian consumers,” ACCC Acting Chair Dr Michael Schaper said.

“Under the Australian Consumer Law, all goods or services supplied to consumers come with automatic consumer guarantees that they are of acceptable quality and fit for the purpose for which they were sold.  If they’re not, consumers have a right to a remedy. These consumer rights cannot be excluded, restricted or modified.”

“We will continue to take action to ensure Australian consumers benefit from these Australian Consumer Law guarantees, regardless of whether the business which supplies them is based in Australia or overseas.” 

The Court has also ordered Valve to:

  • publish information on Australian consumer rights on their website for 12 months,
  • implement a consumer compliance program for their system and staff, and
  • not make any similar representations to Australian consumers for three years.

Background

Valve is an entertainment software and technology company located in the United States. Valve owns and operates an online computer game distribution platform known as ‘Steam’ that has over 125 million users worldwide, with approximately 2.2 million of those users in Australia. In 2015, Valve’s revenue was reported at over $3 billion.

The ACCC recently issued a media release highlighting the rights shoppers have under consumer guarantees: 20,000 complaints by shoppers about consumer guarantees

To find out more about consumer guarantee rights, please visit: Consumer rights & guarantees 

 

Release number: 
MR 2/17
ACCC Infocentre: 

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