Page:Australian Competition and Consumer Commission v Valve Corporation (No 3).pdf/11

 EDELMAN J:

Introduction

1 The respondent, Valve, is a company based in the State of Washington in the United States of America. Valve operates an online game distribution network known as Steam. The Steam online game distribution network contains approximately 4,000 video games with names ranging from "Plants vs Zombies GOTY Edition" to "Thirty Flights of Loving". Valve has more than 2 million Australian subscriber accounts. Many customers buy or download multiple games from Valve. Valve operates and controls a website (the Steam website), an online video game delivery platform (the "Steam Client"), and an online support assistance service known as "Steam Support" which is accessible from Steam or the Steam website.

2 The applicant, the ACCC, alleges that Valve made misrepresentations in relation to the acceptable quality guarantee in s 54 of the Australian Consumer Law which, by s 64, could not be modified or excluded. The ACCC says that Valve (i) contravened s 18(1) of the Australian Consumer Law by making representations which were misleading or deceptive or likely to mislead or deceive, and (ii) contravened s 29(1)(m) by making false or misleading representations about the existence or effect of the consumer guarantees. At the heart of these alleged misrepresentations were statements by Valve, such as the statement in its terms and conditions in capital letters: "ALL STEAM FEES ARE PAYABLE IN ADVANCE AND ARE NOT REFUNDABLE IN WHOLE OR IN PART".

3 Valve defended these proceedings on a variety of grounds. Three of the grounds involved submissions that the consumer guarantees of acceptable quality in s 54 of the Australian Consumer Law did not apply to Valve.

4 First, Valve said that its conduct did not occur in Australia and that it does not carry on business in Australia so the Australian Consumer Law did not apply to it. There are some difficult issues involved in determining whether "conduct" is in Australia, but even if Valve's conduct was not conduct in Australia, the Australian Consumer Law would apply if Valve carried on business in Australia. Valve said that it does not carry on business in Australia despite Valve (i) having more than 2 million user accounts in Australia, (ii) generating potentially millions of dollars in revenue from Australia, (iii) owning, and using, servers in Australia, with original retail value of US $1.2 million, (iv) having relationships with