
ACCC Conducts Sweep of Online Statements for Compliance with Australian Consumer Law
In Short
The Development: The Australian Competition and Consumer Commission ("ACCC") recently announced that it had conducted a sweep of more than 2,000 Australian retail websites that found some businesses' return policies and website terms and conditions may contravene the Australian Consumer Law ("ACL").
The Context: Under the ACL, Australian consumers have automatic and mandatory consumer rights ("Consumer Guarantees"). These apply to all businesses providing goods or services to Australian consumers—including foreign corporations irrespective of having a physical presence in Australia.
Looking Ahead: ACL compliance is a continuing focus area for the ACCC. Businesses selling goods or services to Australian consumers should be aware that they are subject to the ACL.
The ACCC recently reviewed 2,000 Australian retail websites for their online return policies and website terms and conditions regarding compliance with the ACL. An enforcement priority for the ACCC in 2025-2026 is to improve industry compliance with the Consumer Guarantees, with a particular focus on consumer electronics.
Under the ACL, Australian consumers have automatic and mandatory consumer rights when buying goods and services. The Consumer Guarantees include a requirement that all goods are of acceptable quality; fit for the purpose for which they were sold; and match their stated description. Consumers are entitled to a remedy, including a refund or a replacement, if the Consumer Guarantees are not met. The Consumer Guarantees are not able to be modified or excluded by contract. Importantly, the Consumer Guarantees apply to all goods and services sold directly to Australian consumers.
The ACL prohibits businesses from misleading or deceiving Australian consumers about the Consumer Guarantees.
ACCC Enforcement
The ACCC has made clear that it is prepared to prosecute businesses for misrepresenting the rights granted by the Consumer Guarantees. This includes enforcement against foreign corporations selling goods or services to Australian consumers—including corporations with no physical presence in Australia.
The most prominent example of this was the ACCC's successful prosecution of Valve in 2016 for making false or misleading representations to consumers in relation to its online gaming platform, Steam.
In defending this matter, Valve unsuccessfully argued that it was not carrying on a business in Australia and that the law of Washington State, the location of its registered office, should apply instead of the ACL. Valve did not have any Australian subsidiaries at the time.
The Australian Federal Court rejected Valve's arguments and found that the terms and conditions in the Steam subscriber agreements, and Steam's refund policies, included false or misleading representations about consumers' rights to obtain a refund for games if they were not of acceptable quality. The Court ordered Valve to:
- Pay penalties totaling AU$3 million (~US$1.9 million);
- Publish information on Australian consumer rights on their website for 12 months;
- Implement a consumer compliance program for their system and staff; and
- Not make any similar representations to Australian consumers for three years.
The ACCC's Sweep
Regarding the ACCC's sweep, ACCC Deputy Chair Catriona Lowe said, "[o]ur sweep has found numerous examples of practices that could potentially mislead or deceive consumers regarding their rights to exchange, refund or return a product."
The ACCC advises that businesses should avoid making statements, in writing or verbally, to the following effect about faulty products to ensure compliance with the ACL ("ACCC Guidance"):
- No refunds are permitted under any circumstances;
- No refunds are provided for sale or specialized items;
- To be eligible for a refund, the consumer has a limited timeframe, from receipt of the good, to return the product;
- Returns will be subject to a processing, restocking or repair fee;
- No refunds are provided for opened or used items under any circumstances;
- Delivery fees are non-refundable; and
- Customers must pay for delivery for returned items.
Businesses subject to the ACCC's sweep may or may have not been notified by the ACCC regarding their online statements. Specific details of the sweep are not publicly available.
Conclusion
The ACCC's internet sweep emphasizes that the ACCC continues to monitor businesses' compliance with the ACL and to execute on its related enforcement priority for 2025-2026. Businesses should be aware of this scrutiny and know that the ACL applies to foreign corporations with no physical presence in Australia.
Three Key Takeaways
- A misrepresentation of the ACL's Consumer Guarantees may attract the ACCC's attention and significant pecuniary penalties.
- This prohibition applies to corporations that are based overseas and sell goods to Australian consumers, including those without a physical presence in Australia.
- Businesses should ensure that their statements, written or verbal, in relation to refunds, replacements and repairs, comply with the ACL and ACCC Guidance.