The penalties were imposed by the Federal Court which has ordered Sony Interactive Entertainment Network Europe Limited (Sony Europe) to pay the penalties.

The Australian Competition and Consumer Commission said in a statement on Friday that Sony Europe made misleading representations to four consumers who believed they had purchased faulty PlayStation games - and that this occurred when Sony’s customer service representatives told them over the phone Sony Europe was not required to refund the game once it had been downloaded, or if 14 days had passed since it was purchased.

“Consumer guarantee rights do not expire after a digital product has been downloaded and certainly do not disappear after 14 days or any other arbitrary date claimed by a game store or developer,” ACCC Chair Rod Sims said.

The Court also declared Sony Europe breached the ACL by telling one of the four consumers it did not have 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.

“What Sony told these consumers was false and does not reflect the consumer guarantee rights afforded to Australian consumers under the Australian Consumer Law,” Sims said.

“Consumers can obtain a repair, replacement or refund directly for products with a major fault from sellers and cannot simply be sent to a product developer.

“Refunds under the consumer guarantees must also be given in cash or money transfer if the consumer originally paid in one of those ways, unless the consumer chooses to receive store credit.”

Sims noted that between October 2017 and May 2019, Sony Europe’s Terms of Service implied that users did not have consumer guarantee rights regarding the quality, functionality, completeness, accuracy or performance of their purchased digital games - and that this was false as these guarantees cannot be excluded, restricted or modified.

“Consumers who buy digital products online have exactly the same rights as they would if they made the purchase at a physical store,” Sims said.

“No matter where in the world a company has its headquarters, if it is selling to Australian consumers, the Australian Consumer Law applies.”

Sony Europe admitted liability and made joint submissions to the Federal Court with the ACCC, and Sony Europe will also contribute to the ACCC’s legal costs.