The Tech Herald

Sony: Waive your right to sue or face a lifetime ban from PSN

by Steve Ragan - Sep 19 2011, 09:00

Wave your right to sue or face a lifetime ban from PSN. Image: Sony.

Sony has added an arbitration clause to its newest Terms of Service (ToS) documentation, which prevents any future class-action lawsuits. The move leaves many gamers with little choice, forcing them to accept their loss of rights or leave the PlayStation Network (PSN).

“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 legal action, unless you and the Sony entity with which you have a dispute specifically agree to do so in writing following the initiation of the arbitration,” section 15 of the new ToS explains.

Customers who want to give notice of a dispute are told to do so in writing, offering Sony the chance to resolve the matter through informal negotiations. If, after 60 days of negotiation, no resolution has been reached, customers can then seek arbitration. However, the negotiations are to be conducted in good faith, which sometimes better serves the corporation more than the customer.

After agreeing to the new ToS, customers can opt out of forced arbitration, if they submit the exemption in writing to Sony within 30 days of accepting the revised terms.

“Your written notification must be mailed to [Sony to the attention of the legal department/arbitration], and must include your name, your address, your PSN account number, if you have one, and a clear statement that you do not wish to resolve disputes with any Sony entity through arbitration,” the document outlines.

However, after October 15, 2011, the date when exemption expires for millions of gamers, arbitration is the only resolution for problems, such as future security incidents that expose Sony’s customers. Small claims court actions are exempt from Sony’s newly developed legal shield.

The kicker to all of these changes is that anyone who accessed the PSN after they went into effect has already agreed to be bound by them. In order to maintain PSN access, gamers were told to agree to the new ToS, which many likely did without checking the alterations.

This is, of course, a problem as they are unaware of their right to opt out, and likely do not know about the new arbitration. Yet, this isn’t Sony’s fault really, namely as it did provide the changes in writing to all customers. But actions like this can often come back to haunt a company.

For its part, Sony said the changes are designed to benefit both the consumer and the company by ensuring there is adequate time and procedures to resolve disputes.

“Come on. At this point, everyone knows that binding arbitration between a company and a consumer wildly favors companies,” wrote Mike Masnick at TechDirt.

A study from a few years back found that companies win in arbitration against consumers 95 percent of the time. Sony knows this. So its move is not about protecting consumers at all, and it's insulting for it to imply that it is,” he added.

If anything, this particular ToS change will probably haunt Sony in an arena outside the legal system. It comes off as more crisis PR from the company and adds another black eye to Sony’s methods of handling the high-profile PSN data breach. Currently, Sony is dealing with several class-action lawsuits over the PSN hack attack.

Users who wish to avoid waiving a core aspect of their legal rights can do so by sending ye olde physical opt-out notification to Sony via the following address:

Attn: Legal Department/Arbitration
6080 Center Drive, 10th Floor
Los Angeles, California

As already mentioned, any such letter must include the user’s name, address, PSN account number (if you have one), and a clear statement that you do not wish to resolve disputes with any Sony entity through arbitration.

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