Sony to pay $3.5 million penalty for misrepresenting PlayStation gamers’ rights

The Federal Court has ordered Sony Interactive Entertainment Network Europe Limited (Sony Europe) to pay $3.5 million in penalties for making false and misleading representations on its website and in dealings with Australian consumers about their Australian Consumer Law (ACL) rights.

Sony Europe made misleading representations to four consumers who believed they had purchased faulty PlayStation games. This occurred when Sony’s customer service representatives told them over the phone Sony Europe was not required to refund the game once it had been downloaded, or if 14 days had passed since it was purchased.

“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,” ACCC Chair Rod Sims said.

The Court also declared Sony Europe breached the ACL by telling one of the four consumers it did not have to provide a refund unless the game developer authorised it, and by telling a fifth consumer that Sony Europe could provide a refund using virtual PlayStation currency instead of 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,” Mr 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,” Mr Sims said.

Between October 2017 and May 2019, Sony Europe’s Terms of Service implied that users did not have consumer guarantee rights regarding the quality, functionality, completeness, accuracy or performance of their purchased digital games. This was false as these guarantees cannot be excluded, restricted or modified.

“Consumers who buy digital products online have exactly the same rights as they would if they made the purchase at a physical store,” Mr 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.”

Sony Europe admitted liability and made joint submissions to the Federal Court with the ACCC. Sony Europe will also contribute to the ACCC’s legal costs.

Background:

The ACCC instituted proceedings against Sony Europe in May 2019.

Sony Europe is incorporated in the UK and is responsible for the PlayStation Network Terms of Service that Australian consumers must agree to when creating and using a PlayStation account. These terms are also made available to the public on the Australian PlayStation website.

Sony Europe also operates the PlayStation Support Centre, which serves Australian consumers who experience issues with their PlayStation games.

In 2018, the High Court affirmed the Full Federal Court’s decision in the ACCC’s case against gaming retailer Valve Corporation which found games it sold online to Australian consumers were subject to the Australian Consumer Law despite the company being incorporated in the USA.

Further information about consumer guarantees under the ACL can be found at Consumer Guarantees.

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