Valve's appeal against a $3 million fine has been denied by the High Court of Australia after it was found that the company misled consumers with its refund policy.
The case dates back to 2014 when the Australian Competition Consumer Commission (ACCC) took action against Valve over an allegedly misleading consumer guarantee.
Despite arguing in 2016 that it wasn't doing business in Australia because digital products being sold through Steam weren't considered "goods", a judge ruled otherwise.
Setting the precedent in Australian law that "goods" include software, the judge found that Valve had engaged in "misleading or deceptive conduct" and made "false or misleading representations to Australian customers".
Valve sought to appeal the decision of the Full Federal Court in December 2017. It was upheld however and the judge ruled that Valve had breached the Australian Consumer Law when selling to Australian users and must pay a $3 million penalty.
"This important precedent confirms the ACCC's view that overseas-based companies selling to Australian consumers must abide by our laws," said ACCC commissioner Sarah Court.
"If customers buy a product online that is faulty, they are entitled to the same right to a repair, replacement or refund as if they'd walked in to a store."
Update (27/04/2018): Establishing its compliance with the ruling, Valve has issued a new consumer rights notice for Australia.
"When you buy video games from Valve Corporation as a consumer located in Australia, the video games come with guarantees under the Australian consumer law that cannot be excluded, including a guarantee that the video games are of acceptable quality," said Valve.
"You are entitled to a replacement or refund from the retail supplier of the video games for a major failure and for compensation for any other reasonably foreseeable loss or damage."