The Australian Federal Court Has Fined Valve $3 Million

In a hearing earlier this afternoon, the Federal Court has fined Valve $3 million over breaches of Australian consumer law for their lack of an advertised refund policy on Steam from 2011 to 2014.

In the judgement published online, Justice Edelman ruled that Valve “engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention” of Australian consumer law when they advertised to consumers that users had no obligation to refunds for games purchased through Steam.

Although Valve introduced a refunds policy on Steam since the case began, the Federal Court found that the breaches of consumer law between 1 January, 2011 and 28 August, 2014, were significant enough to warrant a fine of $3 million.

The fine is to be paid within 30 days. Justice Edelman also ruled that a notice must be displayed to Australian users:

For a period of 12 months after 20 February 2017, for the benefit of Australian Consumers logging onto the Steam Website from a computer with an Australian IP address (based on the IP look up table available to the respondent current as at the consumer’s login), the respondent will publish on the home page of the Steam Website a link, in a typeface of at least 14 point Times New Roman, reading “IMPORTANT NOTICE ABOUT CONSUMER RIGHTS IN AUSTRALIA”, which directs them to a notice in the terms set out in Annexure A1 (“Consumer Rights Notice”).

The court also found that Valve must “establish and implement an Australian Law Compliance Program to be undertaken by each employee of the respondent or other person involved in the respondent’s business who deals or who may deal with Australian Consumers”.

The notice to be displayed to Australian consumers is as follows:

On 24 March 2016, the Federal Court of Australia found that Valve Corporation had engaged in misleading conduct contrary to the Australian Consumer Law in representing to Australian consumers via the Steam Subscriber Agreement and Steam Refund Policy that consumers had no entitlement to a refund in any circumstances and that Valve had excluded, restricted or modified statutory guarantees of acceptable quality. A link to the Federal Court judgment appears here.

When you buy video games from Valve Corporation as a consumer located in Australia, the video games come with guarantees under the Australian Consumer Law that cannot be excluded, including a guarantee that the video games are of acceptable quality. You are entitled to a replacement or refund from the retail supplier of the video games for a major failure and for compensation for any other reasonably foreseeable loss or damage.

You are also entitled to have the video games repaired or replaced by the retail supplier of the video games if the video games fail to be of acceptable quality and the failure does not amount to a major failure. Certain other rights are available directly against manufacturers that cannot be excluded or limited.

The test for acceptable quality is whether a reasonable consumer, fully aware of the state and condition of the video games, would find them:

a. safe, durable and free from defects;

b. acceptable in appearance and finish; and

c. fit for all the purposes for which video games of that kind are commonly supplied. This must take into account the nature and price of the video games, and any statements on packaging or labelling.

Valve has until 20 February next year to appeal the fine and the ruling.