This is the question that a case currently before the Federal Court is likely to answer. Last year the ACCC brought proceedings against Valve Corporation alleging that Valve made misleading or deceptive representations about consumer guarantees under the Australian Consumer Law (ACL).

The law on consumer guarantees has changed recently and many suppliers are having difficulty adjusting their communications with customers to meet the new requirements. It is all the more difficult for businesses such as Valve that have no physical presence in Australia and yet sell to Australian consumers. In its defence, Value is challenging whether the ACL applies to the supply of online access to video games via a subscription service. It is likely to be an important issue for all online video game providers that deal with Australian users.

In a recent development in the case, Valve served a notice to admit to seek to extract admissions from the ACCC that its user/subscriber agreement, statements on its website and the dealings between its representatives and Australian users did not contravene the laws of Washington in the United States, where Valve is based. Although it was common for the recipient of a notice to admit to either ignore or dispute the notice, the ACCC challenged this one as irrelevant. The Court agreed.

The Court decided that it was irrelevant whether or not Valve Corporation has contravened any laws applicable in the State of Washington. What mattered was whether Australian laws were engaged or not. The notice was set aside and a warning issued by the Court about the care required before attempts were made to adduce expert evidence about Washington state law. This indication, albeit early, suggests that it will not be sufficient for online subscription services to rely to their legality under their local laws when brought before an Australian Court.