The Federal Court has ordered that Sony Interactive Entertainment Network (Sony) pay AUD$3.5 million in penalties as a result of making false and misleading representations to consumers in connection with their rights under the Australian Consumer Law (ACL).
Sony is incorporated in the United Kingdom and is responsible for the PlayStation Network (PSN). It operates the PSN and PlayStation store and provides Australian consumers with access to the PSN. This includes the “terms of service” to which Australian consumers must agree when creating and using a PlayStation account.
The second respondent, Sony Interactive Entertainment Europe (SIEE) is also a based in the United Kingdom and is Sony’s parent. SIEE is responsible for the content available at the PlayStation website. This includes displaying on its website the “terms of service”.
In 2019, the Australian Competition and Consumer Commission (ACCC) instituted proceedings in the Federal Court of Australia against Sony and SIEE alleging contraventions of sections 18 and 29(1)(m) of the ACL.
The ACCC alleged that between October 2017 and May 2019 Sony had made false and misleading representation to consumers who were seeking a refund for a faulty game sold by Sony. These consumers had issues with either downloading or playing the game.
The ACCC alleged that Sony customer service representatives had told customers that Sony was not obliged to provide refunds:
Terms of Service
The ACCC also alleged in its terms of service Sony stated or implied that:
The ACCC argued that:
The Federal Court found in favour of the ACCC and declared that Sony had breached the ACL on the basis that it had made misleading representation to four (4) Australian consumers as to their rights under the consumer guarantee provisions of the ACL.
Sony was also found to be in breach of the ACL by telling one of the four consumers that Sony was not obliged 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.
Sony admitted liability and made joint submissions to the Federal Court with the ACCC. Sony will also contribute to the ACCC’s legal costs.
This decision serves as a timely reminder about the risks and consequences of making false or misleading representations to consumers under Australian law. Critically it demonstrates the “long arm of the law” and shows that Australian regulators are quite prepared to pursue and seek enforcement against overseas based companies for breaches of Australian consumer laws. Any international company that sells goods or services to Australian consumers needs to properly ensure its commercial offering and the legal remedies available under its “terms of service” reflect Australian law.
Antoine Pace, Partner
Dudley Kneller, Partner
Lisa Haywood, Associate