Valve Found Guilty of Breaking Australian Law with Steam Refund Policy

Court proceedings regarding Steam's lack of refund policy find Valve guilty of breaching Australian Consumer Law


Valve Corporation, the company behind the Steam PC distribution platform, has been found guilty of breaching Australian Consumer Law due to Steam’s lack of a refund policy, as ruled by the Australian Federal Court and reported by Kotaku Australia.

Steam did not have its current refund policy in place when proceedings commenced in 2014, involving allegations that Valve was in direct breach of Australian law which states: "It is a breach of the Australian Consumer Law for businesses to state that they do not give refunds under any circumstances, including for gifts and during sales."

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Today, the Australian Federal Court ruled that Valve had made "false or misleading representations in the terms and conditions contained in three versions of its Steam Subscriber Agreement and two versions of its Steam Refund Policy". These include:

  • Consumers were not entitled to a refund for digitally downloaded games purchased from Valve via the Steam website or Steam Client (in any circumstances);

  • Valve had excluded statutory guarantees and/or warranties that goods would be of acceptable quality; and

  • Valve had restricted or modified statutory guarantees and/or warranties of acceptable quality.

Although Valve sells games to Australian consumers through Steam, it does not have a physical presence in the country, which was a major cause of contention.

Kotaku Australia reports that Valve stated that it did not officially trade in Australia, but only provided online access to video games through a client, which they felt did not fall into the definition of 'goods' as it is defined in Australian Consumer Law. Valve also stated that its Steam Subscriber Agreement is based in the law of the State of Washington, USA, and not that of Australia.

Today, Justice Edelman ruled that Valve was indeed conducting business in Australia, due to the three aforementioned representations in the Subscriber Agreement, which involve conduct in Australia.

In a press release, Australian Competition and Consumer Commission Chairman Rod Sims stated that: "The Federal Court’s decision reinforces that foreign based businesses selling goods and/or services to Australian consumers can be subject to Australian Consumer Law obligations, including the consumer guarantees."

"This is also the first time Courts have applied the extended definition of 'goods' to include "computer software" in the ACL. It will provide greater certainty where digital goods are supplied to consumers through online platforms.”

"Consumer issues in the online marketplace are a priority for the ACCC and we will continue to take appropriate enforcement action to hold businesses accountable for breaches of the ACL."

Kotaku reports that a hearing on relief is currently scheduled for April 15, but there is no set amount for liability.

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