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Court knocks back $3M penalty appeal by online gaming giant Valve

Court knocks back $3M penalty appeal by online gaming giant Valve

Comes after Valve was found to have breached Australian consumer law by making false or misleading representations to consumers

The High Court of Australia has dismissed an application by one of the world’s largest online gaming companies, Valve Corporation, to appeal a court order that it pay penalties of $3 million for breaching local consumer laws.

On 23 December 2016, the Australian Federal Court ordered Valve, operator of the Steam game distribution platform, to pay penalties totalling $3 million for breaching the 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.

Valve subsequently sought special leave to appeal from the decision of the Full Federal Court in December 2017, which upheld the trial judge’s ruling that Valve had breached the Australian Consumer Law when selling to Australian users, and that it pay the $3 million penalty.

As a result of the High Court’s refusal of special leave, the Full Federal Court’s decision that Valve is bound by the Australian Consumer Law in its dealings with Australian customers, despite being based overseas, marks the final decision on this issue, according to Australia’s consumer watchdog.

The Australian Competition and Consumer Commission (ACCC) took legal action against Valve in 2014 for allegedly making “false or misleading representations” to local consumers.

“This important precedent confirms the ACCC’s view that overseas-based companies selling to Australian consumers must abide by our laws,” ACCC commissioner Sarah Court said.

“If customers buy a product online that is faulty, they are entitled to the same right to a repair, replacement or refund as if they’d walked in to a store,” she said.

In January last year the ACCC issued a warning to overseas-based online software and technology resellers operating locally off the back of the court’s decision to hit Valve with millions in penalties over consumer law breaches.

Specifically, the ACCC highlighted 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 deputy chair, Dr Michael Schaper, said at the time.

“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.


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Tags governmentlegalgamingacccvalvelawonline retailcourt

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