The Australian competition watchdog has issued a warning to overseas-based online software and technology resellers operating locally after US-based online game provider, Valve, was hit with millions in penalties over consumer law breaches.
On 23 December, the Australian Federal Court ordered Valve, one of the world’s largest online game retailers and operator of the Steam game distribution platform, to pay penalties totalling $3 million for breaching Australian consumer law.
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.
When Justice Edelman handed down the penalty order for Valve in late December, he 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”.
The court also ordered Valve to publish information on Australian consumer rights on its website for 12 months, implement a consumer compliance program for its system and staff, and to not make any similar representations to Australian consumers for three years.
The court orders come more than two years after the Australian Competition and Consumer Commission (ACCC) said it would take legal action against Valve for allegedly making “false or misleading representations” to local consumers.
Now, the ACCC is highlighting the Valve case in a bid to caution other online retailers over their adherence to Australian consumer law and associated regulations.
“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,” he said.
2016 saw a number of online electronics retailers come under the watchful gaze of both national and state industry regulators, with the ACCC taking action in December against MSY Technology, which operates an online store in addition to physical retail outlets.
Online technology retailers also populated the NSW Fair Trading complaints tally for November last year, with online reseller, Android Enjoyed, – operated by Digital Skies Group – the subject of 26 complaints by consumers in the state for the month ending November 2016.
Included on the NSW Fair Trading November complaints list for November were Zoxoro.com, Harvey Norman, and Grays Online.