Valve's Appeal Against $3 Million Fine Dismissed By High Court

Valve's ongoing lawsuit with the ACCC is coming to an end, after the High Court of Australia dismissed the company's special leave application to appeal their $3 million fine.

The ACCC announced this morning that the High Court's decision means that the Full Federal Court's ruling remains in effect. Valve had sought leave to appeal the original decision from 2016, whereby Justice Edelman fined $3 million for refusing to provide Australians with refunds for video games from 2011 to 2014.

The Australian Federal Court Has Fined Valve $3 Million

In a hearing earlier this afternoon, the Federal Court has fined Valve $3 million over breaches of Australian consumer law for their lack of an advertised refund policy on Steam from 2011 to 2014.

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Here's Precisely Why Valve Lost To The ACCC In Federal Court

As reported earlier this week, the Federal Court ruled that Valve was guilty of breaching Australian Consumer Law.

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"As a result of the High Court’s refusal of special leave, the Full Federal Court’s decision that Valve is bound by the ACL in its dealings with Australian customers, despite being based overseas, is the final decision on this issue," the ACCC wrote.

"This important precedent confirms the ACCC’s view that overseas-based companies selling to Australian consumers must abide by our laws," Sarah Court, commissioner at the Australian consumer watchdog said.

"If customers buy a product online that is faulty, they are entitled to the same right to a repair, replacement or refund as if they’d walked in to a store."


Comments

    I wonder if this will have a flow on to Nintendo, which currently refuses eShop refunds.

      Doesn't matter if you agree to a user agreement or terms of use, As i told PlayStation, I don't care about your terms of use as it violates my rights as an Australian consumer, A product you sold on your digital storefront doesn't work, I had no way of knowing if the game would or wouldn't work before making my purchase, Even offering store credit is an abuse of your rights as store credit is not a refund, Making you contact the developer of a game or the publisher is also an abuse. We have fair dinkum consumer protections in place, Ppl need to know what they're & use them to their benefit as we pay alot for games etc. .

      Maybe, but I haven't heard of any downloadable Nintendo software falling into the category of faulty.

      "If customers buy a product online that is faulty, they are entitled to the same right to a repair, replacement or refund as if they’d walked in to a store."

      You're not entitled to a refund if you simply change your mind and decide you don't want the game anymore, you're only entitled to a refund if it doesn't work properly. And...to my knowledge anyway, all of Nintendo's eShop products work properly.

      IF one of them was faulty to some degree, then things might get interesting.

        There's a few games that perform poorly in portable mode (I don't mean subjective 30fps limitations, but games that are really choppy or laggy) that are available on the eShop that I think would be a good case for being faulty.

          What games change from hardware to portable hardware?

          Last edited 30/04/18 7:48 am

            Rime used to be the prime example, but I hear that's since been fixed. Xenoblade Chronicles 2 is another one. Nights of Azure 2 comes to mind as well (though I'm not sure if this one is on the eShop).

        You are entitled to a refund if the game does not work, or does not meet acceptable standards (buggy) for the price you paid. You are also entitled to a refund if the game is misleadingly advertised.

        There is also a fine for having a no refunds policy that does not reference the ausssie clauses.

    Great, with this over does that mean we will finally get AUD prices on games? wasn't this lawsuit the thing that was holding them back?

      Depends how they react. They implied during one of the court sessions that I sat in that they might just ignore the fine altogether - Justice Edelman wasn't especially thrilled with that one. So in a sense, I don't think this is *quite* over.

        Wait they told a high court Justice during an appeal they would ignore a ruling to pay... they lucky he didnt treat them as hostile and place a special order for the funds.

        They care so little about how the gaming public view them because of how big Steam is, It needs a viable competitor badly to keep their nonchalant dodginess in check, We don't even have Steam Spy now.

          Yeah, but who? People are actively ignoring other platforms, except for GOG but GOG is treated as a place for old games... and people will still usually go to Steam anyway because all their games are there.

          We handed Valve majority control over PC gaming digital distribution, now we're going to have to put up with it.

            Basically that's the current situation, I see no other future, Maybe government regulatory bodies will one day get involved as Valve's inability or want to do anything about the more nefarious goings-on on the Steam platform will bring attention to their business practices, Valve has taken action against third party skin re sellers but that seems only because they were losing out on their cut of the sales. I kinda hate Valve & their "godly" Status. They're a business like any other.

      The ruling wasn't holding it back. Valve were just being dicks.

      Last edited 20/04/18 1:38 pm

        oh i know that, but i believe the dickery was because they were trying to convince the government that they "technically" weren't an Australian store because they put the prices in USD, not AUD, and changing that would hurt there case.

        They've lost twice now, so they should just own up to it and make the change.

          There is no appealing a High Court decision unless they take it to the JCPC or something like that (Cheaper to pay the 3mill at that rate and not likely to ever get to that level)

      I suspect their reasons for continuing to charge in US$ have more to do with GST than refunds. If pretending they don't do business in Australia means they don't have to collect GST on their sales to Australians, then that's what they're going to do.

      Of course with the plans to get overseas businesses to collect GST, that loophole is being closed. So I wouldn't be surprised if they start charging in AU$ as a result.

        Valve have been collecting GST from Australians since July 1, 2017. In all instances I have been able to check Valve have simply absorbed the 10% and have not increased their prices. Check you invoice next time you make a purchase from Steam.

    The main problem is if they ignore it what can we do?
    The short answer is nothing.

      The judge has options to force payments if they refuse... they can delay all they want but international law and US law says the money is payable.

      Criminal charges for refusing the orders of the Court is also an option.

        International law is essentially good will. International courts have no real power, countries have signed in to agreements saying they will respect the courts ruling but there is nothing to compel them too.
        I'm unaware of what US law has to do with this as it's an Australian case where they breached Australian laws, I'm not sure what the US legal system has to do with this at all. Care to elaborate?

          US Law recognises by international treaties the laws of Australia and other countries, if there is any issue they can be presented by the Australian Government (or its agencies) to the US Government (or its agencies) for resolution.

          While Valve has the right to dispute any claims, in a US court, the court would only hear the case on its legal merits that their was an apparent issue with two court rulings and considering one appeal has already been heard, that's unlikely. The US court would order the US Sheriffs to work with the Australian Sheriffs for the seizure or even go so far proceed with criminal charges. Its like extraditing money, it happens a lot, especially with taxation.

          Or better yet, go to Germany and file the court order their. That's where the banks are, and they are not fans of US corporations in the EU either :P

      They'll just seize their servers, the ones they pay $250,000+ a month for.

      The government can get a court order to block Steam's IP addresses and prevent Australians without a VPN from making further purchases through the platform.

        But also then stopping Australians who have paid money for a service from being able to receive it. I don't see a court granting that.

          IP blocking is already the law with respect to companies that refuse to collect GST. Courts enforce the law. As a general rule courts aren't in the business of consumer protection.

          The government might of course step in, but we already know from game consumers getting pretty consistently screwed over by the Australia Tax (which the government has failed to do anything about), by the GST on electronic purchases, from oppressive censorship out of step with the rest of the planet, and from a shitty NBN, that game consumers are pretty low in the pecking order of influential lobby groups.

            But the government doesn't give a court order the courts do, in doing so they look into the effects of it. As there would be a huge effect to legitimate paying consumers from games that need steam servers to run, therefore punishing innocent people, I wouldn't guarantee they would agree to it. The ACCC would most likely push to block such an anti consumer move as well even though they are the ones owed money.

    $3 million is spare change for Valve.

    Just pay the bloody fine Valve, and stop being dicks by continuing to argue about it and drag it through the courts. You did the wrong thing, you got pinged for it.

    I don't purchase games through Steam and it's times like this I'm glad I don't.

    Last edited 20/04/18 12:05 pm

      $3 million free asset to throw around is not a spare change for many companies. I don't think many companies have that much of free flow cash around lol. It is also a wrong way of doing business by withholding free flow cash without using it to invest on something to make more money.

        Its not a pull out your wallet and pay now... they have options on how to pay that.

        Also they probably spent that much on lawyers alone. We are not talking a small business, this is multibillion dollar company with revenue reported at around 730 million dollars in 2014.

        $3m is a lot of money to some companies, but not to companies the size of Valve. Given their market share in the PC gaming market, $3m is small change to them. That would be a drop in the ocean of a single month's revenue.

        It would be poor business of them to NOT have a hell of a lot more than that sitting around in cash. They would have a lot of cash going both in and out every month just from their regular operations.

        Sorry, I edited my post, I forgot to mention $3m it not a lot of money for Valve specifically.

        Last edited 21/04/18 9:43 am

          I mean, $3 is not a lot of money for many *individuals*, let alone specifically pointing out that it is not much for Valve. But I guess you will edit your post.

        I think many people do not know how big company operates. You do not keep cash lying around doing nothing. They are spent on either allocating funds to different departments such as R&D, advertising, HR, salary, etc.

        A company should not "keep" cash sitting around doing nothing. Having $3m cash is equivalent to having $1 cash. Both of them are sitting there doing nothing with no possibility of growing. All available funds will be used to invest/purchase on anything that will help the company grow.

        TL;DR

        No company should keep extra cash around doing nothing that will help increase company revenue.

          You should have a chat to Microsoft. They've had the GDP of a small sized country sitting around in cash doing SFA for years.

            Well, that certainly explains a lot of things.

            Cough *internet explorer* Cough *xbox one exclusives*

            My wish is that they're saving up to buy Sony. A funnier end to the console wars I could not imagine. If it wasn't for Sony's film/music back catalog MS wouldn't even notice it.

            Or Nintendo. They have $10.5 billion dollars in the bank and could run at a annual loss of over $230 million dollar for over 30 years without having to worry about producing a successor to the Switch or a new Zelda game :P

          Yeah not many people do know how companies operate. Though the equation that high revenue must equal high profit is my biggest gear grinder.

            It doesn't have to be high profit, it just needs to be at least $3M profit, which on stupidly high revenue is still chump change even if the margin is only 1%.

              You have access to these renege figures no one else does?

                Valve does not make its finances public. In 2005, Forbes estimated that Valve had grossed $70 million that year. Ed Barton, a Screen Digest analyst, estimated Valve's 2010 revenue to be in the "high hundreds of millions of dollars". As of 2011, the company had an estimated worth of $2 to 4 billion, and according to Newell it was the most profitable company per employee in the United States. Most of Valve's revenue comes from its Steam service, which controlled 50 to 70% of the market for downloaded PC games in 2011.

                "Half of Steam’s $4.3 billion in revenue for 2017 was generated by just 100 games" according to Steam Spy... 2016 being 3.5 billion.
                https://www.vg247.com/2018/03/24/steam-4-3-bilion-revenue-2017/

                Steam Spy recently

                Really not clear how your comment relates to mine. Regardless, Valve is not a charity and it's self evident that Valve is not running at a loss as evidenced by numerous statements from Newell and various finance industry estimates, not to mention Valve's own disclosures to the court in the case that we are discussing here.

            There is a difference from having a company, and owning a corporation. Valve is not a fledgling business or a publicly traded company, they have a major revenue streams... which means they can leverage that to either pay by instalment, or get credit. Don't think their german bankers would be afraid to give them a 3 million loan on an income of over 760 million per year.

            What makes you think that Valve doesn't have 3 million dollars?
            If they didn't have money, they would be over extended, which would mean if they made one mistake they could lose the whole business... they would be so desperate they would make Half Life 3... 3... 3... thats why they can't pay, Gabe can't see the number 3!!!!

              Yeah I completely agree, they can get the money of they want to, but I hardly think it's spare change for them as people make it out to be.

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