A court ruling against Steam, the world’s biggest game distributor, means that offshore sites selling software to Australians now have to comply with local consumer laws.

The US-based Steam has been found guilty of deceptive conduct in Australia.

The consumer watchdog ACCC (Australian Competition and Consumer Commission) took Steam’s owner Valve Corporation to the Federal Court over incorrect representations to Australian consumers about the guarantees under the Australian Consumer Law.

The court found that Valve made the following false or misleading representations:

• consumers were not entitled to a refund for digitally downloaded games purchased from Valve via the Steam website or Steam Client (in any circumstances);
• Valve had excluded statutory guarantees and/or warranties that goods would be of acceptable quality; and
• Valve had restricted or modified statutory guarantees and/or warranties of acceptable quality.

Justice Edelman concluded that Valve was carrying on business in Australia.

“The Federal Court’s decision reinforces that foreign based businesses selling goods and/or services to Australian consumers can be subject to Australian Consumer Law obligations, including the consumer guarantees,” says ACCC Chairman Rod Sims.

“In this case, Valve is a US company operating mainly outside Australia, but, in making representations to Australian consumers, the Federal Court has found that Valve engaged in conduct in Australia.

“It is also significant that the court held that, in any case, based on the facts, Valve was carrying on business in Australia.”

This is the first time an Australian court has applied the extended definition of “goods” to include “computer software” in consumer law.

Sims says this will provide greater certainty where digital goods are supplied to consumers through online platforms.

A hearing on penalties will be held on a date to be fixed by the Court.

Valve owns and operates Steam which has more than 125 million users worldwide, with 2.2 million of those users in Australia. In 2015, Valve’s revenue was reported at more than $3 billion.

Digital gaming sales worldwide grew 8% from 2014 to 2015 and has become a $61 billion industry.

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