Perfect! Sony Tekken 2 Court By ACCC

The Federal Court of Australia recently handed down its decision in ACCC v Sony Interactive Entertainment Network Europe Limited. 

The case provides a useful reminder on the importance of training your customer service representatives in the Australian Consumer Law (ACL). 

The case

Sony Interactive Network Europe Limited (Sony) operates the PlayStation Network (PSN) and PlayStation Store. 

PlayStation users can purchase digital copies of computer games through the PSN, the majority of which are developed and published by entities unrelated to Sony. 

Sony made various representations to PSN users about their consumer rights in circumstances where a game they purchased suffered a major fault, including:

• users are not entitled to refunds for digital purchases;
• any refunds were to be made in PSN credits only, rather than a refund in AUD;
• refunds could only be processed within 14 days of purchase; and
• the user required the publisher’s (or developer’s) authorisation before a refund could be processed. 

The ACCC commenced proceedings against Sony, alleging that the above representations (among others) were misleading or deceptive. 

Statutory consumer guarantees

The ACL includes a guarantee that goods supplied to consumers are of acceptable quality. 

This guarantee cannot be excluded by a supplier, and is in addition to any express warranty provided.

Should a good supplied not be of acceptable quality, the consumer is entitled to have the good repaired, replaced or refunded (depending on the severity of the fault). 

Accordingly, Sony’s assertions that users were:

• not entitled to refunds;
• only entitled to PSN credit; and
• not entitled to refunds after 14 days,
• were misleading. 

Further, requiring users to obtain authorisation from the publisher (or developer) contravened sections 259 and 263 of the ACL, which permits a consumer to obtain redress directly from the supplier of the goods. 

Therefore, Sony could not shift responsibility to the publisher (or developer) in circumstances where the computer game was defective. 

The Court ordered Sony to pay pecuniary penalties of $3.5 million, as well as an extra $100,000.00 towards the ACCC’s legal costs. 

Further, the Court ordered Sony to publish a corrective notice on its website for 120 days, outlining to users that it had engaged in misleading or deceptive conduct. 

Lavan comment

The majority of the representations referred to in this case were made by customer service representatives over the phone. 

If those representatives were better informed as to Sony’s obligations under the ACL, this unpleasant saga might have been avoided. 

It is important to train your staff so that they understand your company’s obligations under the ACL. Ultimately, your customer facing employees speak on behalf of your company, including when they do so in error.   

If you require assistance in understanding your obligations under the ACL, do not hesitate to contact Nick Stagg or Andrew Sutton.