The Australian Competition and Consumer Commission has warned online software resellers operating in Australia that they must abide by local laws even if they are based overseas.

It follows in the wake of a $3 million fine to online video game reseller Valve, who was penalised last month for breaching Australian Consumer Law by making false or misleading representation to customers about their rights to a refund if a product was not of an acceptable quality.

Based in the US, Valve owns and operates video game marketplace Steam, which has more than 125 million users worldwide, 2.2 million of which are in Australia. The ACCC sued Valve for the breach in 2014, and in March last year, the court ruled that Valve was obligated to offer refunds to Australian customers,

Justice Edelman said that Valve had formed the opinion it was not compliant with Australian law as a US-based company, adding that “Valve’s culture of compliance [which] was, and is, very poor”.

ACCC acting chair Dr Michael Schaper said the significant fine should send a message to online retailers operating in Australia that they’re beholden to local laws.

“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,” he said

“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.”

As part of the ruling, Valve is required to publish information on Australian consumer rights on its website for the next 12 months, implement a consumer compliance program and not make any similar representations to Australian customers for the next three years.