Page:Australian Competition and Consumer Commission v Valve Corporation (No 3).pdf/12

 businesses in Australia, and (v) paying tens of thousands of dollars monthly to Australian companies in expenses for running its business in Australia.

5 Secondly, Valve submitted that the Steam Subscriber Agreement (SSA) it entered with consumers was not a contract to which the consumer guarantees in the Australian Consumer Law, Division 1 of Part 3-2 (Chapter 3) apply because the law which has the closest and most real connection to the SSA is the law of Washington State. There is no express provision which limits the operation of Division 1 in this way. Valve effectively submitted that such an implication derived from the conflict of laws provision, s 67, which contains terms to prevent a consumer from attempting to contract out of the Division by choosing a foreign proper law. The effect of Valve's submission is that if it contracted with Australian consumers, but (possibly unknown to the consumer) made the supply through an Australian subsidiary supplier, then the consumer guarantees would be impliedly excluded by Division 1 because of the connection between the contract and Washington State. In other words, by implication but not by express terms, Division 1 would not apply even where an Australian consumer received a supply of Australian goods from an Australian subsidiary in Australia.

6 Thirdly, Valve submitted that it does not "supply goods" within the meaning in s 2(1) of the Australian Consumer Law. The definition of "goods" in the Australian Consumer Law includes "computer software". The core of the supply by Valve was computer software. Valve said that it provided a "service" (by a Licence Agreement) rather than "goods" and that its supply to consumers of software was part of its service. Valve also said that a licence agreement for a use of goods is a service not a supply of goods even though (i) the term "supply" is defined to include a hire and an agreement to hire and (ii) the Australian Consumer Law expressly provides that a reference to a supply of goods includes goods supplied with services.

7 For the reasons below, each of these submissions must be rejected. The issue then becomes whether the representations made by Valve contravened ss 18(1) and 29(1)(m) of the Australian Consumer Law.

8 The misleading representations were said to have been made in (i) the SSAs, (ii) the Steam Refund Policies displayed on the Steam website from 1 January 2011, and (iii) during online "chats" between three Australian consumers (Mr Miller, Mr Miles, and Mr Phillips) and Steam Support staff. The ACCC said that the alleged misleading representations were all displayed to consumers on computer screens or electronic devices in Australia.