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Valve loses Australian legal battle, found guilty of breaking consumer law

Valve loses Australian legal battle, found guilty of breaking consumer law

March 29, 2016 | By Chris Kerr

The Australian Competition and Consumer Commission (ACCC) has won its legal battle against Valve

An independent authority put together by the Australian government to protect consumer rights, the ACCC sued Valve back in August 2014 after finding fault with its Steam refund policy. 

The ACCC took issue with the fact that Valve wasn't offering refunds on games purchased through Steam; a stance it claimed was in breach of Australian consumer law, which states that if a product is faulty or of unacceptable quality, consumers have a right to a refund, repair or replacement.

At the time, Valve's Doug Lombardi claimed the company was "making every effort to cooperate with the Australian officials on this matter."

The Federal Court, however, has now found that Valve "engaged in misleading or deceptive conduct and made false or misleading representations to Australian consumers."

According to the Court, Valve's Steam Subscriber Agreement and Steam Refund Policy proved that Valve had intentionally excluded statutory guarantees that goods would be of acceptable quality, and by restricting refunds, had deliberately modified warranties. 

"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,' said ACCC Chairman, Rod Sim.

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

According to Sims, this is a landmark victory that should protect consumers who regularly purchase digital goods, such as the digital downloads Valve was selling through Steam. 

"This the first time Courts have applied the extended definition of ‘goods’ to include “computer software” in the ACL," he continued. "It will provide greater certainty where digital goods are supplied to consumers through online platforms."

A hearing on relief is due to be held on a date to be fixed by the Court.

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