The Australian Federal Court has ruled that PC gaming digital retailer Valve is not exempt from Australian consumer protection laws, despite being a foreign online entity.
Justice James Edelman has ruled in favor of the Australian Competition & Consumer Commission, finding that Australian consumer laws apply to digital products sold by foreign companies. This ruling means that Valve could face a $1.1 million penalty for each infraction, across its roughly 2.2 million Australian users.
Valve’s terms and conditions state that all payments take place in advance and are not refundable. According to the ruling, this places them in breach of Australian consumer law and qualifies as a misleading representation to consumers in Australia regarding their rights. And while Valve maintained in their defense that the cited consumer laws did not apply to them, Justice Edelman did not agree.
The landmark ruling will now serve as a precedent in defining digital goods in the same manner as physical, as well as a guideline to future interactions between foreign companies and Australian citizens. Rod Sims, chairman of the ACCC, said that the court’s decision would “provide greater certainty where digital goods are supplied to consumers through online platforms.”
The penalty is steep enough to sting just about any digital distributor, except perhaps for the gargantuan privately-held Valve Corporation. They had an estimated worth of roughly $2.5 billion back in 2012, and have only continued to grow since then. Nevertheless, it will now officially become a major consideration for any digital storefront that seeks to do business with Australian consumers.
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