Global online gaming giant Valve Corporation has had its appeal against a $3 million fine quashed, with the Federal Court insisting it be penalised for misleading conduct.
The US-headquartered game and technology developer, whose games include the Half-Life and Team Fortress franchises, was handed the massive penalty by the Federal Court in 2016 after it was found guilty of making false or misleading claims about consumer guarantees.
According to the Australian Competition and Consumer Commission (ACCC), which prosecuted the case, Valve has 2.2 million Australian subscriber accounts on its Steam game distribution platform. However, the company attempted to argue that it was not bound by Australian Consumer Law in relation to guarantees and refunds because it is a foreign-based entity.
At the time, Justice James Edelman described Valve has having a “very poor” culture of compliance. He said that Valve “formed a view … that it was not subject to Australian law” and that “even if advice had been obtained that Valve was required to comply with the Australian law, the advice might have been ignored”.
Valve appealed the judgment, but in its judgment handed down just prior to Christmas, the Full Court of the Federal Court of Australia upheld the conviction and penalty.
“The Full Court found Valve carried on business in Australia, and was therefore bound by the Australian Consumer Law in its dealings with customers here,” said ACCC Chairman Rod Sims.
“The Full Court also upheld the finding that Valve made misleading representations about consumer guarantees and that certain terms and conditions in the Steam subscriber agreements and refund policies were false or misleading.”
It brings to an end a lengthy process after the ACCC first took legal action against Valve back in 2014.
Warranty and refund policies have tripped up a number of businesses, particularly online retailers, in recent years.
Australian retailer MSY Technology, which operates around 30 stores nationally, was handed a $750,000 fine in October last year for similarly misrepresenting warranty obligations.