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Wednesday, March 30, 2016

ACCC v Valve: ACCC Wins

by Adrian Chang

The ACCC has marked another kill against game distribution platforms – this time it has taken down Valve Inc, owner of the legendary Steam software distribution platform.

In a press release, the consumer watchdog said Justice Edelman of the Australian Federal Court has found that Valve made false or misleading representations to consumers in its terms and conditions of three versions of its Steam Subscriber Agreement and two versions of its Steam Refund Policy.

The text of the judgment has yet to be publicly released.

The ACCC says that Justice Edelman found that Valve had represented that:
  • 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; and
  • Valve had restricted or modified statutory guarantees and/or warranties of acceptable quality.
Under the Australian Consumer Law, companies selling goods or services to consumers must guarantee that their products meet minimum standards of quality and may not state or suggest to their customers that they are not entitled to those minimum guarantees.

ACCC Chairman Rod Sims hailed the decision as reinforcing the application of the Australian Consumer Law to foreign companies that market to Australian consumers. Mr Sims also credited the judgment as the first to extend the definition of the term 'goods' to software.

The ACCC's win against Valve follows its success against Electronic Arts' Origin platform last year, where EA gave enforceable undertakings to amend its terms and conditions to comply with Australian consumer protection law. The ACCC alleged that EA had engaged in essentially the same conduct as Valve.

These actions show the ACCC is serious about ensuring Australian consumers enjoy the statutory protections guaranteed by the Australian Consumer Law. It is tempting for large foreign corporations to apply pro-forma, worldwide terms and conditions to their products, but at least in Australia, that approach invites scrutiny and possibly enforcement action.

Having now established the substance of their claim, the ACCC can now roll for loot. The parties are scheduled to reconvene before Justice Edelman to make submissions as to remedies on 15 April 2016.

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