The Federal Court is ordering video game giant Sony to pay $3.5 million in fines for breaching Australian consumer law in regards to their refund policy.
On Friday, Justice Simon Steward ruled the company had made misleading representations to four consumers who believed they were entitled to refunds after purchasing games.
The customers who digitally downloaded games that they were unhappy with were later told by Sony that they were unable to get their money back, even if the games had been faulty. In this case, the games worked but failed to meet the consumers' expectations.
The case centred around Sony's misleading claims about consumers' refund rights when they made complaints after encountering difficulties with downloading or playing a game purchased from the PlayStation store.
The charges were made against Sony Europe, which is incorporated in the UK and provides the terms of service agreement that Australian consumers must agree to when creating and using a PlayStation account - the terms are also made available to the public on the Australian PlayStation website.
“Consumers who buy digital products online have exactly the same rights as they would at a physical store,” ACCC chair Rod Sims said in May of last year, when proceedings were first brought against the company.
“Sony Europe’s alleged conduct may have caused Australian consumers to not seek a refund, replacement or repair for a faulty game when the Australian Consumer Law gave them a right to do so.”
Mr Sims said that no matter where in the world a company has its headquarters, if it is selling to Australian consumers, Australian Consumer Law still applies.
“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,” he Sims said.
“What Sony told these consumers was false ... 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.”
The company also admitted liability and made joint submissions to the Federal Court with the ACCC. Sony Europe will also contribute to the ACCC’s legal costs.
This occurred when Sony’s customer service representatives told them over the phone that they were not entitled to a refund for a digitally downloaded game, or a game purchased more than 14 days earlier.
The court also declared Sony breached the ACL by telling one of the four customers that it did not have to provide a refund unless the game developer authorised it, and by telling a fifth consumer that they could provide a refund using virtual PlayStation currency instead of money.
Sony Australia declined to comment.