Digital Retail

August 28, 2017

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In 2016, about 7% of retail goods sold in Australia were sold online. Online retailers are often based overseas and sometimes in jurisdictions with less stringent consumer laws than Australia.

The issue of jurisdiction recently came before an Australian Court as to whether digital content was covered by the Australian Consumer Law (“the ACL”). The Australian Consumer and Competition Commission (“ACCC”) has been successful in applying consumer guarantees to digital content such as computer games by treating them as a “good”.

The case that established this leap is ACCC v Valve Corporation (No 3) Pty Limited. The Australian Courts and Regulators now take the view that the ACL applies to digital content and digital products.

It was found that although Valve did not produce digital content in Australia, Australian Consumer Law was engaged because Valve was an incorporated body which was carrying on business in Australia. This case demonstrates that Australian consumers' rights under the ACL can extend to rights against foreign corporations when goods are purchased over the Internet. Such rights can operate regardless of the choice of law clause in the contract of the foreign business.

The Court's broad interpretation of "carrying on business" in Australia also shows that foreign businesses conducting online transactions with Australian consumers can be found to be carrying on business in Australia despite having no business premises in this country

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