Valve Corporation v Australian Competition and Consumer Commission

The appeal and cross-appeal arose from proceedings brought by the Australian Competition and Consumer Commission (ACCC) against Valve Corporation, a foreign corporation with significant business operations in Australia, primarily through its online games distribution service known as "Steam". The ACCC alleged that Valve engaged in misleading or deceptive conduct and breached consumer guarantees under the Australian Consumer Law (ACL). The primary issues before the court were whether the consumer guarantees in Division 1 of Part 3-2 of the ACL applied to Valve's supply of goods and services under contracts governed by the law of a country other than Australia, and whether Valve was carrying on business within Australia for the purposes of the Competition and Consumer Act 2010 (Cth). The court examined the objective proper law of the contracts and whether the representations made by Valve on its website were addressed to Australian consumers.

The court found that the consumer guarantees did not apply to Valve's supplies under contracts governed by the law of Washington State, as the objective proper law of the contracts had its closest and most real connection with Washington State. The court applied a two-stage approach to determine the proper law of the contract, consistent with the decision in Akai Pty Ltd v People’s Insurance Company Ltd. The court also concluded that Valve was not carrying on business within Australia, despite having a significant number of Australian customers and incurring substantial expenses in Australia, because it did not have business premises or employees in Australia and did not hold real estate within the country. The court held that Valve's activities in Australia were insufficient to constitute carrying on business within Australia for the purposes of the Act.

The appeal and cross-appeal were dismissed, and Valve was ordered to pay costs. The court's decision clarified the application of the ACL's consumer guarantees to foreign suppliers and the criteria for determining whether a foreign entity is carrying on business within Australia.