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If Sony PS3 users blindly click through the console's terms of service, they sign away their right to bring class action suits against Sony or join existing class actions.  (Source: Simpsons/Matt Groening/20th Century Fox)
Updates terms of service state that the customer is guaranteeing if it sues Sony it can't be a class action

Uh oh, Japan's Sony Corp. (TYO:6758) is back at it again.  The company who installed malicious rootkits on users computers via music CD, banished OtherOS from the PS3, and legally harassed/tried to sue into bankruptcy hardware enthusiasts who modified the firmware of the Playstations they legally purchased, has come back with another controversial policy.

In an update to its popular PS3 gaming console Sony writes in the Terms of Service (TOS) that the user guarantees:
ANY DISPUTE RESOLUTION PROCEEDINGS, WHETHER IN ARBITRATION OR COURT, WILL BE CONDUCTED ONLY ON AN INDIVIDUAL BASIS AND NOT IN A CLASS OR REPRESENTATIVE ACTION OR AS A NAMED OR UNNAMED MEMBER IN A CLASS, CONSOLIDATED, REPRESENTATIVE OR PRIVATE ATTORNEY GENERAL LEGAL ACTION, UNLESS BOTH YOU AND THE SONY ENTITY WITH WHICH YOU HAVE A DISPUTE SPECIFICALLY AGREE TO DO SO IN WRITING FOLLOWING INITIATION OF THE ARBITRATION. THIS PROVISION DOES NOT PRECLUDE YOUR PARTICIPATION AS A MEMBER IN A CLASS ACTION FILED ON OR BEFORE AUGUST 20, 2011.
The contract is similar to the one presented by some employers.  Since a 1984 U.S. Supreme Court ruling, binding arbitration has been increasingly used by corporations to escape lawsuits when behaving abusively.  

Here's how binding arbitration works.  The signer waives their rights to join or bring class action lawsuits.  Instead, they can present their case to an "arbitrator" appointed by the company.  This is essentially equivalent to a dismissal, as the company's "unbiased" private arbitrator nearly almost always dismisses the case.  The only alternative allowed is an individual suit against Sony, which again, will likely be a lost cause given that Sony has high powered attorneys on retainer, which will seek to quickly have your claims dismissed without the power of a class.

Unfortunately even if you don't sign such contracts, just receiving them is enough to partially nullify your right to due process, according to recent rulings.

Fortunately Sony has offered customers an opt out.  The TOS states:
IF YOU DO NOT WISH TO BE BOUND BY THE BINDING ARBITRATION AND CLASS ACTION WAIVER IN THIS SECTION 15, YOU MUST NOTIFY SNEI IN WRITING WITHIN 30 DAYS OF THE DATE THAT YOU ACCEPT THIS AGREEMENT. YOUR WRITTEN NOTIFICATION MUST BE MAILED TO 6080 CENTER DRIVE, 10TH FLOOR, LOS ANGELES, CA 90045, ATTN: LEGAL DEPARTMENT/ARBITRATION AND MUST INCLUDE: (1) YOUR NAME, (2) YOUR ADDRESS, (3) YOUR PSN ACCOUNT NUMBER, IF YOU HAVE ONE, AND (4) A CLEAR STATEMENT THAT YOU DO NOT WISH TO RESOLVE DISPUTES WITH ANY SONY ENTITY THROUGH ARBITRATION.
In other words Sony provides no electronic opt out, you must write it a letter.  And of course Sony could claim not to have received that letter, unless you pay extra for tracking and signature on delivery.

Why all the legal gymnastics in the terms of service?  Well, several lawsuits are pending class action status against Sony.  Most involve the company's failure to protect PS3 users' private data, including credit cards, from hackers.  Sony was hacked dozens of times [1][2][3][4][5][6][7] in recent months thanks to woefully lacking security.  

Granted the change may not exempt Sony from some of these lawsuits, which were filed before August 20.  It does, however, prevent users from participating in future class actions should Sony conduct itself in an abusive or negligent manner.

Of course, should the Supreme Court overturn such "opt in" contracts, Sony ability to pressure users into signing away their rights could vanish.  However, there's little guarantee that will happen anytime soon.


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RE: lulsec?
By FITCamaro on 9/17/2011 12:23:20 PM , Rating: 0
Yeah and why do you think that is? Do you deserve a few million dollars because PSN was hacked? Sure if your identity gets stolen as a result you have a valid claim to sue them if they won't cover the costs of fixing the situation. But even then there is nothing illegal about not having good security in place, so really have they done anything wrong to warrant the suit?

Lawsuits are about determining guilt for a wrong done against a party. Sony didn't do you any wrong. Jackasses behind a computer did. Now you can try to make the case that Sony knew that their security sucked and ignored it at the detriment of their customers.

Ultimately these lawsuits end up being sob stories designed to move a jury. Which is what has made legal systems the joke they now are. Legal systems are not designed to go off emotion but facts. But idiots like you and activist judges don't care about that.

Am I defending Sony? No. I am explaining the reality of the situation. Unlike you I don't subscribe to the whole "corporations are evil" mantra. And there are very few cases where an individual has a legitimate claim for millions of dollars against a company. This was certainly not one of them.

As Reclaimer said, large lawsuits do nothing but make lawyers rich. They do nothing to stop companies from doing things that consumers don't like.


RE: lulsec?
By cochy on 9/17/2011 12:55:59 PM , Rating: 3
You missed my point totally. Simply, my point is that consumers have a massive legal disadvantage against large corporations. Because in America at least, legal advantage is also gained by how much money you throw at the problem. Class action is a way to level the playing field. That's all I was saying.

For you to say that large lawsuits don't stop companies from doing something is pretty silly because losing these large lawsuits ends up hurting the bottom line of these companies quite a bit.


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