In a recent post, we spoke about how digital gaming sales have outperformed retail – however, while the online retail space is a great way to reach a wider audience, it is important to remember that the law still applies online.
The Federal Court has recently found that Valve Corporation (the company behind the popular game distribution platform, Steam) made false or misleading representation regarding consumer guarantees. In this case, the Courts have confirmed in this case that ‘goods’ includes ‘computer software’ under the Australian Consumer Law – meaning that digital goods are not an exception under the ACL.
We see so many Terms and Conditions these days that it is common to see someone scroll past the legal jargon of a standard T&C press “Accept” (we are all guilty of it) when installing a new program or making an online purchase, without any thought. As a result, many retailers assume that consumers will be unlikely to actually read over what they are agreeing to and overlook the importance of complying with the law on their online retail websites.
However, the Valve case illustrates just how important it is to adhere to the law in your online retail activities. The Court found that in a number of Valve’s policies, they had misled consumers to believe that they would have no right to a refund (under any circumstances) for digitally downloaded games and they had excluded or restricted statutory guarantees and/or warranties that the goods would be of acceptable quality. The ACL protects consumer’s right to a refund, repair or replacement if goods are not of acceptable quality and are not fit for the purpose for which they were sold.
Despite the fact that Valve is a US company, the Australian Court found that they had engaged in such conduct in Australia by making representations to Australian consumers. This means that online retailers must be aware of who they are distributing their products to and they must be aware of what law applies in the country that they are selling to so that their online contracts and policies adhere to the law.