Valve Corporation was slapped a substantial fine in an Australian court earlier this week over the company’s online gaming site Steam’s refusal to pay refunds to gamers who requested them.
According to a report from the Sydney Morning Herald, Valve was given the maximum fine of $3 million AUD for violations of Australian Consumer Laws, as it had disregarded these laws and displayed a “lack of contrition.”
Per Valve attorney Karl Quackenbush, the U.S.-based company only reviewed Australia’s consumer protection laws in April 2014, when the Australian Competition and Consumer Commission began investigations into the Steam refunds issue. The company also relayed its obligations under Australian law verbally, instead of in writing.
“Valve is a United States company with 2.2 million Australian accounts which received 21,124 tickets in the relevant period containing the word ‘refund’ from consumers with Australian IP addresses,” wrote Justice James Edelman in his ruling.
“Yet it had a culture by which it formed a view without Australian legal advice that it was not subject to Australian law, and it was content to proceed to trade with Australian consumers without that advice and with the view that even if advice had been obtained that Valve was required to comply with Australian law the advice might have been ignored.”
A report from PC Magazine suggests that the $3 million fine Valve received was much greater than the fine that it believed would be fair. Valve suggested in March that it be fined $250,000 over Steam’s inability to offer refunds to customers. But Justice Edelman was far from impressed by the “fair penalty” proposed by the company, noting that that was “not even a real cost of doing business” – in other words, a slap in the wrist for Valve.
The Sydney Morning Herald also noted that Australian gamers ticked a box stating that they agreed to Steam’s terms and conditions about 24.9 million times between 2011 and 2014, and considering that extremely large number of customers, Justice Edelman said that it was “impossible” to calculate the number of customers who were “affected by the misrepresentations.”
Justice Edelman’s ruling states that Valve will have to update its Australian website with specific instructions. The company must post a notice in size 14 text that illustrates consumer rights for gamers interested in buying games via Steam. Refunds should also be issued to consumers compliant to Australian laws.
PCMag, however, added that prior to the filing of the Australian court case, Valve launched a “wide-reaching” refunds initiative in 2015 that covered most issues customers may potentially encounter with games purchased via Steam. Valve said in its hearing that it offered over 15,000 refunds for customers who weren’t able to install or properly play titles, and customers who accidentally purchased the wrong version or iteration of a game.
As Destructoid noted, last year’s initiative comes with its share of caveats. Gamers have to request refunds within two weeks of buying the titles, and would have had to have accrued less than two hours of playtime. The Steam refund policy also states clearly that customers found to be “abusing refunds” in order to play games for free will be dealt with accordingly, and may no longer be given their money back.
A newer report from Destructoid suggests that the Australian ruling may have serious repercussions for U.S. companies, particularly gaming stores, who do business outside of the country.
“Online retailers that actively sell products to Australian citizens still have to comply with the country’s consumer laws, even if the company itself resides in another nation. In fact, it’s entirely possible that this precedent could be used to go after other digital distribution services, such as the Xbox Store, the iOS App Store and the PlayStation Store.”
[Featured Image by ESB Professional/Shutterstock]