Australian consumer law protects people who purchase goods from Australian companies, but what recourse do you have for a refund when you’ve bought something from an overseas business that has little or no physical presence in Australia?

A recent Full Federal Court case, between the Australian Competition and Consumer Commission (ACCC) and Valve Corporation, has set a precedent for foreign-based businesses to abide by Australia consumer law in most circumstances. This applies equally if a business is carried on, or if conduct is carried on in Australia, even if the foreign corporation has little or no physical presence in Australia.

Valve is a US-based company and one of the world’s largest online video game retailers. Its business premises and staff are all located outside of Australia and it holds no real estate in Australia. The only asset it holds in Australia are computer servers. Payments for subscriptions to its platform were made in US dollars and processed in the US.

To use the platform to download games, users had to acknowledge subscriber agreements, which contained various representations including no entitlement to refunds, and contractual exclusion of statutory guarantee. Valve sold a catalogue of games to users from various game developers. Some of those games did not appear to be finished or had game-breaking bugs, which caused the games to be either unplayable or not of acceptable quality. When several users attempted to obtain refunds for those games, Valve asserted that as per their subscriber agreement, they do not offer refunds or exchanges.

The original case was kick-started by ACCC after complaints from some gamers who used the platform to buy games that were not of acceptable quality and were subsequently refused a refund. In the original case, Valve lost when the Court found that they had engaged in misleading or deceptive conduct and made false or misleading representations. The Court had further imposed a penalty totaling $3 million.

Valve appealed the judgment and lost again in the Full Federal Court, which upheld the Federal Court’s initial findings. Whilst the arguments and judgments involved in this case are complex, the outcome is clear. If you purchase goods from a company that carries on business in Australia, the seller is bound by Australian consumer law.

If you have been refused a refund for a purchase that was not of acceptable quality, you now have the full weight of the law behind you.

CategoryAccounting, Social
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