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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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Sad times.
By Haelstrom on 9/19/2011 9:28:50 AM , Rating: 2
We have only ourselves to blame. We built these large corporations by buying their products and using their services. They have more money, more lawyers, and more time. Individuals have no chance at ever suing a company of this size for any substantial amount. Now I don't believe I should get a million dollars because someone hacked their network and stole my personal info. I do believe I should be fairly compensated for my lose of money and time to resolve such problems. I should not benefit from it though. Now, the monetary cost to the company should be significant as to persuade the company to make sure it doesn't happen again. Any company that holds any of your personal information has a legal requirement to keep that information safe. Class action suits do not benefit individuals with monetary gain but do entice the corporations to do what is right and not just what is more profitable. If the company can't make money with out screwing its customers then I suggest they take a hard look at themselves and start fixing the issues instead of just taking it out the customers. But as a large corporation why bother. We can just write in EULA's that relieve you of your rights any legal actions against us. Of any significance anyway. They are not trying to protect themselves from frivolous lawsuits. They are protecting themselves from your legal rights to force them to do whats right and not just whats more profitable. More and more companies are starting to write this type of crap into their EULA's. Its not just Sony. Recently Origin (a company used to sell downloadable games from EA.) posted a new EULA for their service. And in the name of (Improving their services) they reserve the right to scan your computer for all software, installed hardware, websites you visit, programs you use most often, crash logs of any program, files you have stored on your computer, and much more. They wrote it so openly that they pretty much had every right to your computer as you do and of course you had to sign away all of yours rights to any repercussions. And since EA is requiring you to log into the Origin system in order to play its upcoming Blockbuster hit Battlefield 3. If you wish to play you must give it up. When the community came together on this and out cried about it Origin decided to back off a bit. They still left themselves open to a lot. I hate government involvement in private business but at times its warranted and this sort of thing must end.




"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il














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