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Controversial Supreme Court Ruling Fueled Sony's TOS Changes
Controversial Supreme Court Ruling Fueled Sony's TOS Changes
September 21, 2011 | By Frank Cifaldi
Comments
    14 comments
More: Console/PC, Social/Online, Business/Marketing

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Last week's changes to Sony's online services user agreements that blocked class action lawsuits was spurred by a recent U.S. Supreme Court ruling, the company recently admitted.

The updated online terms last week said that by agreeing, consumers waive their rights to be represented as part of a class, and that any dispute resolution proceedings "will be conducted only on an individual basis."

Speaking to CNN, a Sony representative confirmed the suspicions of some analysts: the new terms were made in response to a U.S. Supreme Court decision that allowed AT&T Mobility to block employees from bringing class-action suits against the company as part of their hiring papers.

"The Supreme Court recently ruled in the AT&T case that language like this is enforceable," a spokeswoman told CNN. "The updated language in the TOS is designed to benefit both the consumer and the company by ensuring that there is adequate time and procedures to resolve disputes."

In reality, the clause saves Sony a lot of money in the event of another widespread legal dispute. While a class-action suit could cost the company millions in miniscule payments to individuals who opt in, this new clause means that complaints would have to be handled individually through arbitration, a much less likely scenario.

The terms include an option for users to opt-out of that specific clause by sending a physical letter to the company, a move experts say could win the company sympathy should it ever have to defend the clause in court.

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Comments

Kevin Reilly
21 Sep 2011 at 2:27 pm PST
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FYI - the AT&T Mobility v. Conception decision was with respect to a class action brought consumers who received a "free phone" and were later charged with sales tax. The phone contract contained an arbitration clause that included a waiver of class action by the consumer. SCOTUS upheld the arbitration clause and waiver.



The other class action suit referred to in the article is the 1M female employees v. Walmart asserting widespread gender discrimination.
Bart Stewart
21 Sep 2011 at 3:28 pm PST
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Individual arbitration to recover individual damages is "a much less likely scenario" than putting together, arguing, and winning a class action lawsuit? In what way? And according to whom?



"In reality" implies that the Sony spokesperson is lying when she asserts that being able to prefer arbitration benefits both Sony and its customers -- on what basis is that claim made? Why specifically is it impossible that this service clause change really could be win-win?



There've been things Sony has done that I don't like, either. I haven't forgotten the rootkit business, and I don't assume Sony is any kind of corporate saint. But this anti-corporation attitude, trendy as it is with the kids, has no place in a straight news story.
Jeffrey Crenshaw
21 Sep 2011 at 4:47 pm PST
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"Individual arbitration to recover individual damages is "a much less likely scenario" than putting together, arguing, and winning a class action lawsuit? In what way?"



In a class action lawsuit, many people only have to pay a few lawyers (and more likely don't have to pay the lawyers at all). In individual arbitration, a single person is on their own against a corporation filled with hired lawyers. If this goes to public court, the individual can't afford to fight. If it is private arbitration, the individual's case is judged by another for-profit company that is incentivized to stay on the good side of those with deep pockets (Sony). Whatever is right or wrong, it is clearly disadvantageous to consumers to let themselves be divided and conquered, and any claim to the contrary is insulting to the consumers' intelligence.



""In reality" implies that the Sony spokesperson is lying when she asserts that being able to prefer arbitration benefits both Sony and its customers"



She is. She is flat out lying. Not just mistaken, lying. That's what PR drones are paid to do. Taking away someone's options can never be beneficial to them. If I am infringed by a company, and I decide that individual arbitration is better for me than a class action lawsuit, that is my decision to make -- not the company's. This claim is made on the basis of common sense.



" anti-corporation attitude, trendy as it is with the kids..."



Jesus Christ.



Yes, it's "trendy with us kids" -- as we try to fix the shithole economy that you corporate-worshipping "adults" left us to graduate with debt into. Thanks.
Ian Uniacke
21 Sep 2011 at 4:57 pm PST
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Bart, it should be self evident but I'll explain. If your complaint is in the order of a couple of hundred dollars (eg my ps3 is broke I want a refund of 200$) are you really going to go to the trouble of hiring a lawyer to fight this? However if 10000 people want to claim 200$ than the risk is much reduced for the consumer...hence the purpose of class action lawsuits. This clause is ridiculous however you look at it and it's one of the worst examples I've seen of corporate corruption.
Christopher Enderle
21 Sep 2011 at 5:03 pm PST
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It's "a much less likely scenario" according to statistics based on reality.

en.wikipedia.org/wiki/National_Arbitration_Forum#Public_Citizen_study
Dave Smith
21 Sep 2011 at 5:39 pm PST
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are you serious, Bart? class action lawsuits are virtually the only way an individual can hope to win in a long legal battle with a massive corporation.
Wylie Garvin
21 Sep 2011 at 3:30 pm PST
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"The updated language in the TOS is designed to benefit both the consumer and the company by ensuring that there is adequate time and procedures to resolve disputes."





Bwahahahahahahahaha.. hahah.. hem.





..... Bwahahahahahahaha!
Jeffrey Crenshaw
21 Sep 2011 at 4:27 pm PST
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"The updated language in the TOS is designed to benefit both the consumer and the company"



Taking away consumer rights is never beneficial to the consumer. This is simply a lie.
Alex Leighton
21 Sep 2011 at 5:51 pm PST
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Well, you always have the right to vote with your wallet.
Jeffrey Crenshaw
21 Sep 2011 at 6:08 pm PST
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"Well, you always have the right to vote with your wallet."



A right I exercise quite often :).
Martain Chandler
22 Sep 2011 at 8:34 am PST
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Once again. People need to read up.



http://www.scotusblog.com/category/special-features/arbitration/



It's a kick in the balls for consumers - but, hey, I had had a company with a ToS I'd sure as hell put that clause in. There is NO DOWNSIDE for businesses here.
Bryan Wagstaff
22 Sep 2011 at 1:43 pm PST
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There really ins't much to see here.



The Federal Arbitration Act specifies that some things can be forced to arbitration, other things cannot.



The SCOTUS had cases before them. They ruled according to the existing law. The Arbitration Act says a contract can force arbitration. The courts sided with the law as written.





People complain that sometimes the courts "legislate from the bench", making new facets to the law rather than applying what is already there. In this case the court applied the law as written, and people don't like it.



If you don't like the law, change it.



Right now Congress is working on a new law the "Arbitration Fairness Act of 2011" to hopefully fix the problems with their current arbitration law. Hopefully Congress gets it better this time. If you have some ideas, write your congress-critters and let them know your opinion.
Kevin Patterson
22 Sep 2011 at 2:34 pm PST
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I won't be supporting Sony in the future if they believe that they can get away with this.. Thanks Sony.
Pierette Winter
25 Sep 2011 at 7:58 pm PST
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I'm a little confused as to how AT&T making it illegal for EMPLOYEES to file class action lawsuits and the Supreme Court saying that's cool has anything to do with Sony making it illegal for CUSTOMERS to file class action lawsuits. I really hope that the Supreme Court notices that blatant difference as easily as I did... Is it an attempt at misdirection from Sony?



Well, I don't have a PS3 nor am I part of the network on my PSP, but I'll be sure to be writing that letter in the event I end up as part of their Network. I think I can get where Sony is coming from if I look at it right, but I don't agree with their actions.



EDIT: I think it is possible some details are missing from both sides of the argument? I'm anything but an expert on corporate structure, political agenda, and legal history, so any comments I make are based upon the article itself.

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