25/09/2014

The ACCC is currently pushing for a court finding that a US company, with over 1.3 million Australian subscribers, is bound by Australian consumer law, even though it does not physically operate or distribute its products in Australia.

A major US online video game provider has recently been brought into the legal spotlight after a claim by the ACCC that it failed to provide refunds to its Australian customers for faulty software.

The ACCC is seeking a court finding that Valve, with over 1.3 million Australian subscribers, is bound by Australian consumer law, even though it does not physically operate or distribute its products in Australia.

So in a world where buying online makes it very hard to work out where the transaction has actually taken place – here, there or everywhere - what rights are available when things go wrong?

Generally, Australian consumer law provides a number of remedies and processes that Australian consumers can access when products or services do not work out as planned. Under the law customers have the ability to seek refunds, repairs or replacements depending on the problem with the purchased product. The law applies to all Australian businesses for any transaction that has occurred after 1 January 2011. When it comes to businesses owned or operated overseas, however, the remedies are not so easy to enforce.

In Valve's case, a number of customers were unable to obtain refunds for faulty video games they had purchased off the company's website Steam. Valve's terms and conditions stated that it would not provide refunds for any purchases made on its website, contrary to the law which makes statements such as "no refunds" illegal, even when the product is purchased as part of a sale. However, as Valve is an overseas company, it has been very difficult for customers to get any help from Valve at all.

Valve is not the only business with these conditions. At the end of 2013, Apple was required to provide an undertaking to the ACCC in regards to its refund obligations for not only products bought in physical stores, but also in its iTunes Store after it made statements about its refund policy that the ACCC argued were misleading.

At this stage, enforcing a remedy against an overseas software provider is still difficult. Until a decision is made in the Valve case, the ACCC recommends the following steps to help protect your rights:

•    look for providers that have clear systems for refunds and replacements where appropriate
•    read the terms and conditions of the product to make sure there are no hidden terms that may cause headaches further down the track
•    if you feel that a company or business is not providing you with appropriate remedies, contact the ACCC directly

There's a fourth that we suggest: be prepared to kiss your money goodbye if the product is faulty.

For more information, call Townsends Business & Corporate Lawyers on (02) 8296 6222.