Steam Fined Millions for Refusing Game Refunds

It seems digital distribution giant Steam is in hot water with the Australian government. Australia is known for having very strict consumer protection laws that were set in place to make sure that citizens don’t fall victim to false advertising and other misleading business tactics. The Australian Competition and Consumer Commission (ACCC) has a large amount of power over the way business is conducted in the country, and, refreshingly, seems to be staunchly pro-consumer. The 3 million dollar fine (the maximum monetary penalty) is a judgment against Valve for failing to uphold an adequate refund policy, which is necessary for them to conduct business in Australia.

Due to the ruling, Steam must introduce a compliance program and make a post in size 14 font on their Australian site that informs Australian customers of their rights. Who is the bad guy in this situation? Is Steam an innocent company being bullied by a foreign government commission? Or are they preying on consumers with refund windows that don’t allow for legitimate returns? In analyzing the situation, it’s important to talk about the elephant in the room that is largely responsible for this fiasco: Steam Greenlight.

The Greenlight program was intended as a platform to allow games in various stages of development to charge for access to alpha and beta versions and secure funding to continue making progress. In an ideal world, developers would take this funding and deliver a timely and polished final version of the game. In practice, it rarely ends up that way. Sure, there are a few gems that make it out of Greenlight and deliver on what was promised, but far too many games fall short or even just flat-out stop receiving updates.

Many games paint a picture of an awesome experience with features many AAA developers would struggle to deliver on, and a lot of naive consumers eat it up and shell out a ton of money for an unfinished project that may never see the light of day as a fully-featured video game. It’s possible to view it as sort of a venture capitalist situation where you take a risk in hopes of seeing awesome games developed, but the ACCC obviously sees the situation differently.

Does Steam have an obligation to police its listings and protect consumers from bad decisions? Or does the fact that Steam’s simply a distribution platform rather than a game’s developer absolve Valve from fault? It’s a nuanced situation and it’s difficult to arrive at any one “right” answer. Regardless, Steam will have to eat this 3 million dollar fine (likely chump change to such a goliath online retailer) to continue doing business in Australia.