Sony Interactive Entertainment Europe has been ordered by Australia's Federal court to pay AUD$3.5 million ($2.4 million) in penalties.
In a statement, the The Australian Competition and Consumer Commission said the platform holder made "false and misleading representations on its website and in dealings with Australian consumers about their Australian Consumer Law rights."
The case centred around four consumers who contacted Sony Europe about purchased games they believed to have been faulty.
Sony Europe operates the PlayStation Support Centre that serves Australia, among other territories. It is also responsible for the PlayStation Network Terms of Service that Australian consumers must agree to.
The four users were told Sony Europe is not required to refund the game after it has been downloaded, or if more than 14 days have passed since purchase.
One customer was told a refund could not be provided unless the game's developer authorised it, while a fifth customer was told a refund could only be provided as PlayStation Store credit.
The Federal Court declared these to be breaches of Australian Consumer Law, as ACCC chair Rod Sims explained in the organisation's statement.
"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," he wrote.
"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."
Sony Europe was also criticised for the version of its terms of service that was live between October 2017 and May 2019.
These terms said users did not have consumer guarantee rights "regarding the quality, functionality, completeness, accuracy or performance of their purchased digital games." This was also declared false.
"Consumers who buy digital products online have exactly the same rights as they would if they made the purchase at a physical store," 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 court with the ACCC.
In addition to the $2.4 million penalties, the platform holder will also contribute to the commission's legal costs.