Gaming giant Sony breached Australian consumer law by refusing to provide refunds for dodgy games and placed “practical impediments” in the way of customers trying to seek redress for faulty products, according to Australia’s competition watchdog.

The Australian Competition and Consumer Commission (ACCC) has begun proceedings in the Federal Court against Sony Europe, claiming the company made “false or misleading representations to Australian consumers on its website and in dealings with Australian customers of its PlayStation online store”.

The ACCC’s filing alleges that Sony Europe breached Australian Consumer Law by refusing to provide refunds to customers for faulty games unless the developer of the game admits it doesn’t work, for saying it doesn’t have to provide a refund for faulty games if it’s more than two weeks after it was purchased, and by claiming it can provide a refund in store credit.

“Consumers who buy digital products online have exactly the same rights as they would at a physical store,” ACCC chair Rod Sims said.

“Consumer guarantees do not expire after a digital product has been downloaded as we allege Sony Europe told consumers, and refunds must be given in the form of original payment unless a consumer chooses to receive it in store credit.”

Under Australian Consumer Law, Australians have the right to a refund, repair or replacement if a product is faulty, not fit for purpose or doesn’t match descriptions made by the business, depending on the seriousness of fault.

False representations

The ACCC’s filing said that from September 2017, Sony Europe told Australian consumers seeking a refund for a faulty game that it doesn’t have to do so because it was downloaded digitally, or if 14 days had passed since the purchase.

It also claimed it could provide a refund with virtual PlayStation currency, and only had to do so if the actual game developer said there was a problem with the game.

It also alleges that from October 2017, Sony’s Terms of Service said that its ability to provide redress for broken games was limited, when this wasn't the case.

“No matter where in the world a company has its headquarters, if it is selling to Australian consumers, the Australian Consumer Law applies,” Sims said.

The ACCC is seeking pecuniary penalties, injunctions, declarations, correctives and costs from Sony Europe.

The competition watchdog collected a range of evidence from Australian consumers to make its case.

One consumer had purchased the game Aven Colony from the PlayStation store and attempted to get a refund for it in July 2017, but a company representative said they would have to get the developers themselves to authorise such a payment.

Another user had purchased and downloaded Hitman from the PlayStation store, but requested a refund in October 2017, saying it doesn’t work. But a Sony representative said it can’t provide a refund for a company that has already been downloaded.
“There’s actually no way for us to refund it,” the employee said. “Because of the way the game works it’s not actually a game. It’s a licence for a game, and we buy that from the publisher, and that’s like a single-use code, so when you start to download the game, we can’t actually take the code back and use that again.”

After downloading Raid: World War II via the PlayStation store, a user requested a refund in November 2017 because it was a “buggy mess”. But again a Sony worker said that “once the game is downloaded, there’s no refund available”.

The ACCC is alleging that these examples, along with several others, are evidence of Sony Europe breaching Australian Consumer Law by not providing refunds for faulty products.

The ACCC also said that the company’s offer to provide store credit instead of a cash refund is placing “practical impediments in the way of customers rightfully seeking a refund”.

The latest ACCC filing came after the High Court in 2018 agreed with the Federal Court’s ruling that games sold in Australia by Valve Corporation, through the Steam online store, are subject to Australian Consumer Law despite the company being based in the United States.

Valve was found to have breached Australian Consumer Law by engaging in “misleading or deceptive conduct and making false or misleading representations to Australian consumers about their rights under consumer guarantees”, with a $3 million penalty imposed.