[UPDATED] ISFE says ruling contradicts established EU law – after French court insists Steam users should be permitted to resell digital games

Update 14:50: The Interactive Software Federation of Europe (ISFE) has spoken out against the French court ruling which said Steam users should be able to resell games. Saying that the ruling “contradicts established EU law and should be overturned on appeal” in a statement released today.

Simon Little, CEO of ISFE, said: “This French ruling flies in the face of established EU law which recognises the need to protect digital downloads from the ease of reproduction allowed by the Internet.  Far from supporting gamers, this ruling, if it stands, would dramatically and negatively impact investment in the creation, production and publication of, not just video games, but of the entire output of the digital entertainment sector in Europe.  If Europe’s creators cannot protect their investments and their intellectual property, the impact on both industry and consumers will be disastrous.

“According to EU copyright law, when it comes to digital and streaming services, every use must be subject to the authorisation of the rightholder and copyright does not expire with their first sale, as it does with physical goods. Physical goods are subject to the “distribution right” and to the “exhaustion doctrine” which means that the purchaser has the right to resell the goods if they were first put on the market with the authorisation of the copyright owner. This is not the case with digital downloads which are subject to the “communication to the public right”, meaning that the purchaser does not have a right to sell them on, without the copyright owner’s permission.”

Based on that interpretation it certainly seems that the court has overreached in this judgement and that the upcoming appeal should sort things out.

Original story: A French court has ruled that Valve is in contravention of EU consumer law by not permitting Steam users in Europe to resell their games.

In a judgment passed by the Paris’ high court Tribunal de grande instance de Paris, the court ruled in favour of French consumer association UFC-Que Choisir, which maintained Valve was in breach of EU law by not permitting players to share or resell products, even digital ones. 

According to French game site, Numerama, the complaint – which was first lodged in 2015 – said Valve’s terms and conditions were unlawful. It also took issue with Valve’s lack of responsibility should an account be hacked and/or Steam Wallet funds lost, and its claim of ownership of user-created content that is uploaded to Steam.

While Steam argued it acted as a subscription service because players do not actually purchase a product but merely lease the rights to play a game, the French court was unconvinced. The ban on reselling games contravenes European Union laws to protect “the free movement of goods within the Union”, the court said, even if those goods as digital. Therefore, EU customers should be permitted to sell used games without the permission of the maker or the retailer.

The court was clear that this only pertained to individual copies of games – so players won’t be able to sell duplicates – and gave Valve three months to comply with the ruling; however, as Valve has already confirmed it will appeal the case, it’s unlikely to go into effect any time soon. 

“We disagree with the decision of the Paris Court of First Instance and will appeal it,” a Valve spokesperson told Polygon in an emailed statement. “The decision will have no effect on Steam while the case is on appeal.”

The case follows similar judgements which saw Australian courts rule against Valve’s refund policy in 2016, resulting in a $3 million fine, and a 2013 case which saw The Federation of German Consumer Organisations take Valve to court for a similar issue following a 2012 EU ruling enforcing the right to re-sell digital goods. Interestingly, Valve won that case in 2014.

Another recent case saw Valve’s Steam and Ubisoft’s Uplay be similarily fined following their noncompliance regarding refunds in France’s consumer code. Valve’s fine for €147,000 (£130k) and Ubisoft’s for €180,000 (£160k) were related to the refund policies offered on each company’s storefronts as neither shop informed consumers that their rights to refunds – as set out in French law – were being denied.

Steam offers refunds in a 14-day window, but only if a game has been played for under two hours. Uplay meanwhile offers no refunds at all. Both approaches aren’t illegal per se, but the fact neither company actually tells consumers they’re getting the short end of the stick is where the real issues arise. Valve amended Steam’s refunds policy earlier this year to bring it closer in line with EU regulations.

The Australian Competition and Consumer Commission (ACCC) also recently filed a complaint against Sony Europe with The Australian Federal Court stating that since September 2017, Sony Europe is breaching consumer law by refusing to honour refund requests 14+ days after a game has been downloaded, something the ACCC maintains contravenes consumer rights under Australian law.

About Vikki Blake

It took 15 years of civil service monotony for Vikki to crack and switch to writing about games. She has since become an experienced reporter and critic working with a number of specialist and mainstream outlets in both the UK and beyond, including Eurogamer, GamesRadar+, IGN, MTV, and Variety.

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