Federal Court of Australia · [2016] FCA 196
PriorityThis Federal Court decision matters to online and overseas-based businesses because it considered when the Australian Consumer Law applies and whether consumer guarantee rights can be excluded by contract terms.
These are plain-English explainers, not legal advice. They are a good starting point, but check the linked official source before you rely on a specific section, and get advice for your situation.
Talk to a lawyerFacts
Valve, a US company, operated the Steam online game platform and sold digitally downloadable games to Australian users. Its subscriber agreement and refund policy told users, in substance, that refunds were not available in certain circumstances and that statutory guarantees or warranties were excluded, restricted or modified. The ACCC alleged those statements misrepresented non-excludable Australian consumer guarantee rights.
Issue
The Court had to decide whether Valve was carrying on business in Australia or otherwise engaging in conduct in Australia, and whether the Steam terms and refund policy made false or misleading representations about rights that cannot be excluded under the Australian Consumer Law.
Outcome
The Federal Court found Valve had made misleading representations about Australian consumer guarantees. The Full Federal Court later dismissed Valve's appeal, including against the finding that it carried on business in Australia and the $3 million penalty.
Commercial note
Online businesses selling to Australian customers should assume the Australian Consumer Law applies, and refund or 'no returns' clauses cannot override consumer guarantees.
Valve is a hard line for online sellers: if you sell digital products or services to Australian consumers, your terms cannot simply opt out of the Australian Consumer Law.
The case is relevant for SaaS, marketplaces, ecommerce stores, app businesses, subscription products and offshore platforms that sell into Australia without a large local office.
Valve operated Steam, an online game distribution platform based outside Australia. The ACCC alleged that Valve's subscriber agreements and refund policies told Australian consumers they were not entitled to refunds in circumstances where the ACL gave them non-excludable rights.
The Federal Court found that Valve made false or misleading representations about consumer guarantees. Later penalty and appeal steps confirmed the seriousness of the issue.
| Term or statement | Why it was risky |
|---|---|
| No refunds in any circumstances | Consumer guarantees can give customers remedies where goods or services fail to meet the required standard. |
| Excluding statutory warranties | ACL guarantees cannot be excluded, restricted or modified by standard terms. |
| Overseas business structure | The Court found Valve's Australian dealings were enough for the ACL to apply. |
Map where customers see refund language
Do not stop at the legal terms. Review help articles, checkout copy, automated emails and support scripts.
Separate goodwill policies from legal rights
A business can set a change-of-mind policy, but it cannot make that policy sound like the whole of the customer's rights.
Localise terms for Australia
If you sell into Australia, add ACL-aware wording instead of relying on a global template.
If you carry on business in Australia or supply to Australian consumers, the ACL can apply regardless of where you are based or what your terms say.
No. Statements that deny or misrepresent consumer guarantee rights can themselves breach the Australian Consumer Law.
ACCC v Valve added as a selected consumer law case
The ACCC v Valve decision is now tracked as a key reference on when the Australian Consumer Law applies to online and overseas sellers.