Refunding Digital Games – The Saga Continues

Nov 18, 2016
Reading Time: 2 minutes
Written by Carmen Zhu

Have you purchased something online but were told by the company that your items were non-refundable?

Having a comprehensive refund policy is important for both consumers and businesses. Refund policies set quality standards for a brand and can often play into a consumer’s final purchasing decision. According to the ABC, in recent years, around a third of products purchased online are returned by consumers.

Under the Australian Consumer Law (ACL), all consumers are entitled to refunds for problematic goods or services.

Ensure that your business complies with Australian legal standards. Under the Australian Consumer Law, if you are selling goods and services online, you are legally required to have a Website Terms and Conditions of Use. With LawPath you will have access to a customisable, ready to use Website Terms and Conditions of Use in under 5 minutes for free.

In August, we examined the importance of refund policies through the case brought by ACCC against American game development company, Valve. Since then, the case has progressed immensely.


In 2014, the ACCC commenced proceedings against Valve for misleading consumers that they were not entitled to refunds. It was also alleged that Valve had made false online representations that the company had no obligation to repair or replace problematic or defective goods.

In March 2016, Valve was charged with breaching the ACL. While Valve’s defence centred on their refund policy as belonging to American laws, the Australian Federal Court quashed this argument. Any foreign consumer terms and conditions which apply to Australian consumers are also captured under the ACL.

Since then, the ACCC is pushing for Valve to pay $3 million in fines. Valve’s defence team instead are proposing a penalty of $250, 000 on the basis that the company “did not intent to mislead or deceive consumers”.

Australian Law – Overseas?

As the case continues, the central issue now turns on the scope of enforcement of Australian laws on foreign companies. Justice Edelman expressed doubt as to the applicability of civil sanctions in overseas jurisdictions.

It will be a balancing act to determine how much Valve can be fined. The ACCC believes that $3 million can achieve the objectives of deterrence and punishment for Valve’s misconduct. The ACCC has also dropped its former request for Valve to establish a hotline to help Australian consumers with refund inquiries.

The eventual outcome will be decided in the following months.

Have you had negative experiences with refunds? Let us know by tagging us #lawpath or @lawpath.

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