Sony has been fined $3.5 million for refusing to refund Australian gamers over faulty products and making “false and misleading” claims on its websites about their consumer law rights.
In May last year, the Australian Competition and Consumer Commission (ACCC) took Sony Europe to the Federal Court claiming the company had made misleading representations to four consumers who believed they had purchased faulty PlayStation games.
The Federal Court has now ruled that Sony must pay $3.5 million in penalties, along with contributing to the ACCC’s legal cost.
Sony has also admitted liability as part of the court case and made a joint submission to the court with the ACCC.
The case revolved around what Sony’s customer service representatives told the four consumers over the phone, including that Sony wasn't required to refund games once they had been downloaded, or more than 14 days after it was bought.
This was contravening Australia’s Consumer Law, ACCC chair Rod Sims said.
“Consumer guarantee rights do not expire after a digital product has been downloaded and certainly do not disappear after 14 days or any other arbitrary date claimed by a game store or developer,” Sims said.
The Federal Court also found that Sony breached Australian law by telling another consumer that it was not required to provide a refund unless the game developer authorised it, and another that a refund could be provided via virtual PlayStation currency rather than actual money.
“What Sony told these consumers was false and does not reflect the consumer guarantee rights afforded to Australian consumers under the Australian Consumer Law,” Sims said.
“Consumers can obtain a repair, replacement or refund directly for products with a major fault from sellers and cannot simply be sent to a product developer. Refunds under the consumer guarantees must also be given in cash or money transfer if the consumer originally paid in one of those ways, unless the consumer chooses to receive store credit.”
The ACCC said that from late 2017 to early 2019 Sony’s terms of service falsely implied that users did not have consumer guarantee rights about the quality, functionality, completeness, accuracy or performance of their purchased digital games.
“Consumers who buy digital products online have exactly the same rights as they would if they made the purchase at a physical store,” Sims said. “No matter where in the world a company has its headquarters, if it is selling to Australian consumers, the Australian Consumer Law applies.”
The application of Australian consumer laws to games sold by offshore companies was tested in 2018. The High Court affirmed the Federal Court’s decision in the ACCC’s case against games distribution company Valve, finding that games sold online to Australians were subject to local laws, no matter where the company was based.
In November last year, the ACCC found the developer of popular game Fallout 76 likely breached consumer law for denying Australian users a refund for the game, which proved to be buggy.
EB Games recently accepted a court-enforceable undertaking to refund consumers the purchase price of the game after initially denying them.