ACCC Asks Court To Fine Valve $3 Million

$3 million: that's how much the Australian competition regulator wants Valve to pay over their lack of an advertised refund policy from 2011 to 2014.

The figure is the latest development in a case that has been ongoing for the last three years. The Australian Competition and Consumer Commission (ACCC) took Valve to court over the company's lack of an advertised refunds policy on their site and within the Steam Subscriber Agreement, and the case has plodded along through multiple depositions, delays, hearings and even a change of judge.

Steam users, of course, are now entitled to refunds. But when the ACCC originally filed their lawsuit in 2014, that wasn't officially the case. There were always reports of users getting one-time or goodwill refunds - such as when games were unfinished, or released in a unplayable state or when or when Valve pulled a game from sale - but there were also instances of users being flat-out denied.

But Tuesday's hearing was not to determine fault or guilt. The Federal Court and Justice Edelman had done that earlier this year. And as a result of that ruling, the ACCC argued that Valve should be fined $3 million dollars "in order to achieve both specific and general deterrents, and also because of the serious nature of the conduct".

Naomi Sharp, presiding counsel for the ACCC, argued that Valve's senior management was "involved in the misconduct" and violation of Australian consumer law. Even though users had eventually received refunds, Valve had advertised that Steam had a "standalone policy to not give refunds" in the Steam Subscriber Agreement which was in contravention with the Australian Consumer Law.

Valve's original defence was based on the company being located and operating out of Seattle. In their eyes, any transactions that took place on Steam marketplace were therefore taking place in the United States, not where the consumer was physically based. "We think of ourselves as an American company doing business in America which has customers all over the world," Valve's general counsel, Karl Quackenbush, testified.

Arguing that there was "no finding that Valve's conduct was intended to mislead or deceive consumers", Valve's attorneys argued in favour of a $250,000 fine instead.

"Your proposed penalty of $250,000 isn’t even the price of doing business, it’s next to nothing is it?" Justice Edelman asked. The ACCC also filed for an injunction against Valve to ensure whether its current refund policy was compliant with Australian Consumer Law.

An intriguing point of contention raised was what Valve's lawyers called the elephant in the room: how an Australian court can enforce a judgement on a foreign corporation. That sparked an intriguing exchange between His Honour Justice Edelman and Valve's attorneys.

"Lurking behind the remedies hearing is the deeper question of enforcement of penal orders in a foreign jurisdiction. And the rule against enforcement of revenue or penal orders may mean in a foreign jurisdiction is that it wouldn’t be able to be executed," Justice Edelman remarked.

After being asked directly whether Valve would resist any penal orders or penalties from the court, Valve's attorney replied that they had "no instructions that Valve at this time will resist the enforcement overseas of any of your Honour’s orders".

The ACCC later announced it was abandoning one of its original demands that would have seen Valve establish a telephone hotline or 1800 number to help Australians deal with any refund queries. Valve had argued that all inquiries were handled through the Steam ticketing system and it would be impractical and unreasonable for the court to force Valve to establish a second and separate line of communication for any affected Australian consumers seeking refunds.

Valve revealed over the course of the case, through prior testimony and Quackenbush's appearance, that it employs around 50 support staff. There was also a lengthy and occasionally testy exchange between ACCC's counsel and Quackenbush over what instructions, documents or training those staff were given about the Australian consumer law.

"Have you given any Valve support staff and instructions or directions in relation to the ACL," ACCC's counsel asked.

"That would be incorrect," Quackenbush replied. When asked whether it was "sloppy" that Valve did not keep anything in writing about what their support staff were told regarding consumer rights under the Australian Consumer Law, he said "it’s completely consistent with how we operate".

Once submissions were finalised, Justice Edelman informed the court that he would aim to hand down his ruling, which would cover both penalties and any potential injunction, by mid-December or January.


    Valve is happy to charge the Aussie tax for games and yet they admit that they're not bound by Australian law when being sued, due to being based in the US. Sure makes sense to Valve.

      I really hope that point was raised in court. It would've been a spectacular skewering.

      If that's the case they should drag the publishers who do this over the coals with them. Looking at you Take-Two.

        they really should drag publishers through the court for the price fixing that some of them have engaged in

    $3 million: that's how much the Australian competition regulator wants Valve to pay over their lack of an advertised refund policy from 2011 to 2014.

    Valve: "Smither's, my wallet is in my left pocket."

      And I'll take that statue of justice too

    Australia: "3 million dollars please?"

    Gabe: "I don't understand..."

    Australia: "3 million..."

    Gabe: "How many million?"

    Australia: "3..."

    Gabe: "What is this number you speak of... thr..... thre..... thr..... th...."

    Last edited 17/11/16 9:57 am

      [^ Continues ^]

      Australia: ".....OK, how about instalments; 2 million now and 1 million next week."

      Gabe: "Oh! I get you now! Why didn't you say you wanted 3 million in the first place? I have the 2 million now but the remaining 1 will be delayed by three years"

        *12 years later* "You said you'd pay the 3!" "Thr.... thr.... thr...... thr...... what?"

          No, they'll see the 2 million. Then two 300 thousand dollar installments.

          But 20 years later they still will not have seen the conclusion to the payments.


            Then valve will release details about a new super bank account capable of holding even more money... teasing the accc but never fulfilling it... "Fine 2.0"

            Last edited 17/11/16 12:22 pm

              Can someone kindly point me the reference of this 3 thing? Thanks!

                Valve is incapable of releasing anything with a '3'. Hence:
                Half Life 2 (plus its episodes, 1 and 2)
                Team Fortress 2
                Left 4 Dead 2
                and so on. It's a running gag; The Nerdist also ran with it when they interviewed Valve supremo, Gabe Newell.

    Good to see. Refusing to refund on digital purchases has got to stop so hopefully this sends a message to those out there still offering no solution.

    Court: If you do not operate in Australia why do most games sold to Australian consumers attract higher prices, over and above the currency exchange rate?

    Valve: Conducting business overseas costs us more money.

    Court: So you do conduct business in Australia then?

    Valve: Oh s%^t

    Chump change to Valve. Good work ACCC. I hope the investigation cost less than $3 million.

      ACCC usually goes for the maximum fine cause the current fines are a joke to multinationals.

      Take the Nuleurofen or Clithes detergent cases, serious breaches milliins in false sales maximum fine caps out to such a tiny amount compared to fraudulent sales or companies final profits.

    Oh no I didn't pick up on that 3 million dollar figure.

    This is a joke that won't die soon, you watch.

    And we are STILL one of the few countries not charged in local currency.

      I wouldn't object to being charged in USD if we were bloody charged the same USD amount as the US is. Why does their $59.99 USD turn into $79.99 USD here?

        'Straya tax. Publishers gotta charge Aussies more for all the money they spend putting ads on our buses.

    I think the most distressing fact here is that a company servicing 125 million registered users, with nearly 10 million of them logged in concurrently at any given moment, earning $3.5B per year... only pays for 50 support staff.

    Fifty. 50.
    That's one person per every 2.5 million users.

    No fucking wonder their support is pure shit.

      Absolutely. That's the biggest part of the article in my eyes. They are taking the absolute piss.

      And yet, when games are released on competitors like Origin that has WAY better support staff and refund systems, people whinge that "No steam, no sale". Part of the problem.

    Okay, so they don't do business in Australia. Then how to they justify Geoblocking? If the transaction takes place in America, and the license for the software is retained in America (they portray themselves as a subscription service, not a games retailer, after all), then how can they justify claiming that because a customer is from a specific nationality, they have to charge a specific rate?

      And if they don't do business in Australia, how do they justify charging different price in Australia? It seems they either thy don't take Australian law seriously or they hired an idiot lawyer. Their arguments are so transparent, a 5 year old can see through them.

      They broke the law FFS!

    Karl Quackenbush sounds like the name of a Groucho Marx film character.

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