Sony: TOS changes prompted by US Supreme Court ruling

Thursday, 22nd September 2011 06:52 GMT By Jessica Citizen

Sony has announced that the recent changes to its online terms of service agreement forbidding class action lawsuits was prompted by a U.S. Supreme Court ruling, in a move which suggests other companies will be leaping to follow in kind.

The recent change is covered under the Binding Individual Arbitration section, which effectively means that consumers have waived their rights to be represented as part of a class. Any disputes with Sony therefore “will be conducted only on an individual basis”, rather than the company being sued by a larger group of people.

The U.S. Supreme court ruling saw AT&T Mobility allowed to block employees from bringing class-action suits against the company by including a clause in their hiring papers. Given how much money and effort legal disputes can chew up, this plan will save the companies a hefty stack ‘o cash. Sony are banking on the idea that individuals are going to be much less likely to take their claims through arbitration by themselves.

If you don’t want to be included in this, you do have a choice. Gamasutra reports that, by sending a physical letter to the company, you can opt-out. Sony doesn’t expect you to do that, either, but it will theoretically silence the haters in case this case ever gets dragged in front of a judge.



  1. Christopher Jack

    I did mention this, I just couldn’t find the ruling.

    #1 3 years ago
  2. aprotosis

    Yeah, because individuals don’t have the money and influence to sue a large company like Sony. They need class status to have a chance in court. This move is just plain coroprate gluttony

    #2 3 years ago
  3. Christopher Jack

    @2, & that’s what America’s all about, they want the rich to get richer & the poor to get poorer. You know your economy is wack when a guy like Charlie Sheen was earning the annual wage of over 30 average people in a single week, celebrities need the biggest pay cuts followed by executives.

    It’s this irreplaceable attitude that these celebrities have that give them the arrogance to demand unreasonable salaries. Sure they maybe talented on the camera, but they sure as hell don’t earn what they receive.

    #3 3 years ago
  4. Yoshi

    @3 Just like Britain is now with the Conservatives in power.

    #4 3 years ago
  5. viralshag

    @4, What #3 said can barely be linked with the Tory’s being in power. Amazingly enough, the rich were getting richer all throughout the time Labour were in charge too, if not more so when you look at the state of the banking industry.

    Britain hasn’t become what it is today in the short space since the Conservatives came back into power and 13 years is a long time to blame the Conservatives for what they did before.

    #5 3 years ago
  6. Cygnar

    Class action suits cost time and money no matter who wins. Years of the discovery process and document production, the costs of court proceedings, and the need to pay attorneys during the entire procedure add up. Does anyone honestly think Sony wants to be embroiled in litigation for years, when it can use the law to escape that risk?

    Sony looked at the AT&T decision and saw a way out of these costs, which is to use a binding arbitration clause to preclude class action lawsuits. Binding arbitration is a court-like way of dispute resolution. If users agree to sony’s current EULA, they have to use this method instead of court proceedings.

    This might strike some of you as tyranny–after all, Sony is robbing consumers of their right to seek remedies at law, right? Well, not exactly. In the license agreement, if you have to travel to California in order to pursue arbitration, Sony agrees to pay your travel costs. It wouldn’t have to do this if the dispute went to an ordinary court. Sony agrees to pay for all your legal fees if you win against them. It wouldn’t have to do this if you went to court. Moreover, if you don’t agree to the binding arbitration terms of the EULA, you have thirty days to object in writing to that term, in which case the arbitration requirements do not apply to you at all. These are all very rare steps for a corporation like Sony to take. They are trying to ensure that the contract is fair, because if the arbitration part is unfair enough (or in a court’s words, “unconscionable”), it is unenforceable.

    With the arbitration agreement, if you have a winning claim against Sony, they pay your travel expenses and your attorney’s fees. Arbitration is faster than litigation. There are disadvantages; for example, there is no jury in an arbitration, decisions aren’t as easy to appeal, initial filing fees may be high, etc. But if these are that unpalatable to you, just object and the requirements do not apply to you.

    If the preclusion of class action suits is a bad idea (I think it probably is), then it is not the job of corporate entities to try and fix it. It is the job of courts and lawmakers to correct their own mistaken laws.

    #6 3 years ago
  7. DSB

    @6 Cool story bro.

    Nobody cares about the expenses or inconveniences involved with a lawsuit. That’s purely up to the respective parties in terms of how much money they want to invest in their claim and their defence.

    It’s not ever going to be a reason to circumvent the legal system, which everybody still retains a constitutional right to use however they please.

    Nobody forces anyone to take on a 10 million dollar legal team.

    All Sony is doing is throwing down obstacles for people to use the system, so they can A) Avoid being held accountable for their actions by a group of people affected and B) Save some of the money they’d have to pay to a class, which is really pretty reasonable if you were to say, negligently protect 70 million peoples personal information.

    #7 3 years ago
  8. Phoenixblight


    Sony is not the first one to do this in fact if you own a cellphone, work for a company, paying a utility bill in the states you have signed a arbitration clause. All Lawyers are paid for is to find ways to circumvent the legal system.

    #8 3 years ago
  9. DSB

    @8 Well yeah, of course they wouldn’t be, and certainly not now while they can still lean on the AT&T and Walmart verdicts.

    More than anything else it’s an example of what happens when you get ideological zealots on a court that’s supposed to be loyal to the country and its laws.

    I hope the Mississippi attempt to overturn Roe v Wade doesn’t go through at this point. I don’t believe feti are people, until Texas executes one.

    (Ditto corporations)

    #9 3 years ago
  10. Cygnar

    First, expenses are important. If you want to sue someone who does business in another state, you may not have the option of suing them in a court near where you live. Did you know that by using either Windows or MacOS, you have agreed that you cannot sue Microsoft or Apple except in the court of their choosing? If you do not have the resources to bring suit in another state, you are unable to litigate your claim.

    Second, the Constitution applies to the Government, not to the people or companies with whom we contract. You may have rights to use the legal system, but you can give up these rights by signing them away in a contract. Don’t think you can? Take it up with the Supreme Court

    Third, Sony has no interest in making litigation easy or available to its customers when it can legally avoid them. If this is the result of bad law, it needs to go back to the federal courts, or better yet, to Congress. It’s not a profit-driven corporation’s job to defend our constitutional rights.

    As for your allegations that Sony is trying to avoid responsibility for the hacking incident, the EULA expressly excludes pre-existing class action suits from the new provisions. Sony cannot cut that suit off and it doesn’t try to with this contract.

    Lastly, I encourage you to object to the contract term if you don’t like it. It doesn’t have to apply to you, and if you aren’t in the United States, you can rest easy because it isn’t in your EULA and it can’t apply outside the US anyways.

    #10 3 years ago
  11. DSB

    @10 I’m not saying that the justice system hasn’t become so perverted that they can’t get away with it. Quite the contrary. It’s just a scumbag move, and the argument that you put up for it has no merit anywhere but in Sony’s accounting department.

    It’s not the governments job to protect Sony from the inconvenience and expense of legal action.

    It’s not Sony’s job to limit our rights.

    They can hide behind the law all they want, that still doesn’t make it less reprehensible. Just as the fact that you can opt out doesn’t make it less reprehensible that they’re trying to remove people from using that right.

    #11 3 years ago
  12. Cygnar

    I don’t think you understand how much respect the American legal system has for freedom of contract. Choice of law, choice of forum, and even binding arbitration clauses are not unique to Sony. Nearly every large corporate entity you have done business with presents one-sided contracts that ask you to sign away your rights.

    For comparison’s sake, I direct you to the Xbox LIVE Terms of Use. Suppose that Microsoft employees intentionally and maliciously cut off your XBL service, cut off access to games that you purchased, and brick your Xbox, all in violation of the contract. According to Section 16, the maximum amount you can recover under the contract with Microsoft is “a total amount equal to your Service fee for one month.” In the US, that amount is as little as five dollars or less. The term “applies even if this remedy does not fully compensate you for any losses, [or if the term] fails of its essential purpose.” Is this term unfair? It sure is. Is it enforceable? You bet. Keep in mind that to get your $5 back, you need to pay your own way to King County, Washington State in order to go to court, according to Section 19, and you need to hire a lawyer to represent you.

    None of this makes the Sony contract good. But before you criticize one company’s contract as being uniquely bad, you should be aware that unfair contracts are absolutely everywhere, they are enforceable, and for-profit corporations are not interested in letting consumers sue them blind. If the law allows them to block suits or reduce their sting, they will take these measures.


    #12 3 years ago
  13. lexph3re

    I love when legal topics arrise and Cygnar hits the forum’s. That guy has done his homework lol

    #13 3 years ago
  14. DSB

    Freedom of contract isn’t universal and it very much needs to adhere to the basic rights of people. Sadly, far too often those are a case of enterpretation at the hands of people who are picked more for their verdicts in line with political dogma, than their overall qualifications.

    I don’t see a company in Europe ever getting away with limiting peoples rights or ability to pursue legal action, even if it is just by adding pointless inconvenience as in this case.

    And of course it’s not just Sony, but it’s not hard to figure out why they’re being singled out in posts like these. Whoevers responsible for their PR strategy really isn’t the sharpest knife in the drawer.

    Why not let a little time pass before you remind people of the event of which we do not speak?

    #14 3 years ago
  15. Cygnar

    A number of countries in Europe have great consumer protection laws, and the USA lags behind them. I recall that in some countries, consumers could easily get a partial refund on PS3s for Sony’s removal of OtherOS, but in the States, there was nothing like that and there are probably still lawsuits about it. But, there are ways to challenge the contract or change the law if Sony uses the new rule to really screw people over. It’s a big theme in the US that the law usually gets things wrong before it gets them right, but I have my fingers crossed that this eventually turns out for the better.

    And I agree about the PR comment. Just because it’s legal for a company to do something doesn’t mean it’s a good idea.

    #15 3 years ago

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