Valve misled customers over Steam refunds: Federal Court

Steam is in hot water after the online gaming store was busted for "misleading customers" over their right to refunds on digitally downloaded games.

In a decision handed down in the Federal Court of Australia last week, Steam's US-based parent company Valve Corporation was deemed to have "engaged in misleading or deceptive conduct and made false or misleading representations to Australian consumers" about their rights under the Australian Consumer Law (ACL).

It's a judgement that has the potential to reach far beyond the confines of the Steam store, with the case the first of its kind to consider computer software as "goods," the same as real world objects bought in a retail store, under the ACL. It also shows the court's power to extend beyond Australia's borders, cracking down on a company that has customers on Australian shores, but no local physical stores, offices or employees.

Steam's refund policy does offer some concessions over refunds, with Steam saying customers can request a refund "for any reason" within 14 days of the purchase date, as long as the game has been played less than 2 hours.

But the Australian Competition and Consumer Commission, which commenced the legal action against Valve in 2014, took issue with Steam's refund policy and subscriber agreement.

According to the ACCC, Steam's fine print included terms and conditions stipulating that "consumers were not entitled to a refund for digitally downloaded games purchased from Valve via the Steam website or Steam Client (in any circumstances)."

The ACCC also said Valve had restricted, modified or totally removed and statutory guarantees that goods (in this case, the digital downloads) would be of "acceptable quality."

In a statement released today, ACCC Chairman Rod Sims said the ruling showed that even foreign-based businesses are still subject to the ACL.

"Valve is a US company operating mainly outside Australia, but, in making representations to Australian consumers, the Federal Court has found that Valve engaged in conduct in Australia...based on the facts, Valve was carrying on business in Australia.

"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."

The Federal Court is yet to make a ruling on any financial penalties for Valve.

Valve has been contacted for comment.