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Opinion: Sony's Updated Terms Of Service - Mountain Out Of A Molehill?
Opinion: Sony's Updated Terms Of Service - Mountain Out Of A Molehill?
September 16, 2011 | By Chris Morris

September 16, 2011 | By Chris Morris
Comments
    20 comments
More: Console/PC, Business/Marketing



Sometimes you have to wonder if Sony even bothers to run things by its public relations department before taking action.

Just as the company was starting to put the consumer badwill of this year's hacking fiasco behind it, it goes and slips a change into the terms of service for the PlayStation Network and the masses began to howl once more.

In a nutshell, in case you missed the outrage yesterday, a new section in the PSN user agreement says that by digitally signing off on the agreement, you consent to refrain from joining a class action lawsuit against Sony unless Sony says you can.

It's another chapter in the "How not to do crisis PR" course that is bound to emerge from Sony's fumbling of so many things this year, but is it legal? It certainly seems so.

"Yes I think it's bad PR by Sony, and they could have handled it differently, but they're certainly within their legal rights," said Michael Pachter, an analyst with Wedbush Securities and a licensed attorney.

Earlier this year, the Supreme Court ruled on a very similar issue in the case of AT&T Mobility LLC v. Concepcion. Justices found that AT&T (or any company) could force customers into arbitration rather than class action suits a decision that court observers said could hurt consumers' ability to challenge companies in court.

While the move was certainly handled poorly by Sony, this really seems to be more a case of the collective gaming public getting riled up over something that has little, if any, consequence for them.

While you're unable to join a class action suit, there's nothing in the terms of service preventing individuals from suing Sony on an individual basis.

Additionally, since the PSN is a free service, Sony has a little (perhaps miniscule) more ethical leeway in adding this sort of a condition. Had Microsoft inserted a similar agreement, yet still had the gall to charge $60 on top of that, the people gathering torches and pitchforks might find themselves standing on the moral high ground.

Class action suits are the sort of thing that sound great in theory. A collection of wronged people banding together to demand some form of retribution. And occasionally, just occasionally, those people get what they deserve serious remuneration for a serious wrong.

In the entertainment world, though. Things generally don't work out so well. Let's look back:

The Hot Coffee class action suit against Take-Two Interactive Software? Members of the class ultimately got $5.
Take-Two shareholders who sued over the company's failure to consider a takeover offer from EA? They got nothing.
The class action suit against The9 for allegedly misrepresenting facts? Dismissed.
That class led by the former Rutgers QB who alleged his publicity rights were infringed by NCAA Football? Also kicked.

In fact, the only class action suit that has had any real impact on the industry in recent years was the one that was spurred by the EA Spouse blog. And consumers weren't the winners there. Developers were.

There are plenty of class suits floating in the wind these days. Sony has a couple already looming due to the security breach. Microsoft is facing one for "unauthorized charges" on Xbox Live Gold accounts. Someone's even trying to convince a judge that EA has gouged the public on the price of the Madden football games. (That's my personal choice for the most ludicrous piece of circular logic making the rounds today, by the way. If you believed Take-Two would keep its 2K football line at $20 indefinitely, you're sorely in need of an economics primer.)

Losing those cases would be a pain for publishers, but the only people to get rich off of them would be the lawyers. Consumers would get a little pocket change (at best) and have to jump through a few hoops to get it.

One other note: Some of the people crying loudest about Sony's action on message boards (though, to be fair, this isn't the case among Gamasutra's commenters) are the 13-16 year olds who clog multiplayer games with their obscenity-laced trolling. What most probably don't realize is their thoughts on this, at present at least, are entirely irrelevant. You can't have standing in a class action suit unless you're 18.

So: PR misstep? You bet! Legal issue? Not so much. A movement full of sound and fury, signifying nothing? Absolutely.


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Comments


David Campbell
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Were you paid to write this, or do you just hate consumer rights?



I don't disagree with any of your points per-say, but I do take high offense to your overall message. "Sit down and shut up. They have the legal right to put in a 'you can't sue us no matter how bad we screw you clause', so nobody should complain."



That kind of toxic thinking is so unbelievably destructive. Does anyone truly believe it's sane that you can force people to give up their right to put forth a class-action lawsuit (meaning a grievance large enough to affect hundreds/thousands/etc, not some petty one-man cash-in attempt)? You don't think it might be harmful to society to live such that they have no recourse against a company that completely screws it's consumers (like by say, letting their personal or financial information leak out)? The current system is busted, sure. But I don't see how simply denying consumers the right to even try fixes anything.



If companies can get away with "you can't sue us because we say so", then consumer rights are effectively dead and they have a free ride. "There's nothing in the terms of service preventing individuals from suing Sony on an individual basis." Oh come on, be realistic for 10 seconds. One person CAN NOT sue a corporation like Sony. It's just not feasible for 99% of the population. The system is built such that one man generally cannot take on a big lawyered-up company, certainly not without putting his family's livelihood at stake. So, what, it's fair if they end up screwing a million people and only end up paying-off 1% of them in settlements? Is that justice?



You say it signifies nothing that there are people trying to defend some semblance of the tiny, tiny amount of rights left in this country? I don't own Sony products, so this doesn't particularly affect me. But I'll tell ya, your little wind-up there freakin' pisses me off, it's seriously just asinine. This country is corporatist enough without your help.

Bowen Turetzky
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^^^



So much this.

Lopi Mackenzie
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I definitely agree

James Taylor
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I joined just so I could agree with David. Chris is mistaken if he believes that subverting the tort system by using contractual law could possibly help anyone except large corporations. Sony is obstensibly taking away every users legal rights unless they act in a criminal way. No one should sign this horrendous agreement!

Hakim Boukellif
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"Additionally, since the PSN is a free service, Sony has a little (perhaps miniscule) more ethical leeway in adding this sort of a condition."

They may have a little more ethical leeway by being a free service, but they still store private information of their users, meaning that users do have something to lose if Sony were to act maliciously or irresponsibly.



"Losing those cases would be a pain for publishers, but the only people to get rich off of them would be the lawyers. Consumers would get a little pocket change (at best) and have to jump through a few hoops to get it. "

Isn't punishing the company for its actions more important than whatever monetary gain the plaintiffs may make from it? To begin with, a loss incurred by a service like PSN would often not be quantifiable into money, so the goal of such a lawsuit should be to force the company to do something about it and prevent it from occurring in the future, not just paying off the plaintiffs.

Cory Pendergraft
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I agree with all of this. In a lot of cases, class action suits are about punishing the offending company, not about making the consumer whole.



What we really need are laws prohibiting these type of clauses in contracts. Access to the legal system for resolving disputes is a fundamental right, and shouldn't be something that multinational corporations are allowed to bully people into waiving.

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

Sylvester O'Connor
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The more and more that I read about the game industry, the more I am noticing a very bad trend. It seems like there is always 2 sides of this same old story. There are those that support the corporations and those that support free will. What do I mean when I say this? Perfect example is this article. Legally, sure Sony has the right to include such clauses. Morally though, they shouldn't and it is unfortunate but it seems that moral reasons have no place in the corporate world.



This is so similar to the debate about the used games industry and why all the developers are now clamoring to say that used games are cutting into their profit. How is that? You have standard and most time limited editions of games that come out all the time along with GS, Amazon, Ebay offering pre orders as well. There are pre-order bonuses that developers give you as a thank you for liking our product. Hell, even these online passes are now getting overbearing. They are making money from putting games out that people like.



It's the same reasons that go behind some people that I know that won't get an xbox because they don't want to be forced to pay just to play games online. I'm no fanboy, but it just seems that in this day and age, corporations are taking advantage of ignorance all the time and it is the consumer that is getting screwed by it.

Jeffrey Crenshaw
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Thanks for the opinion piece, but I believe I disagree with everything presented here =(. Well, I at least agree that this was terrible PR.



"Justices found that AT&T (or any company) could force customers into arbitration rather than class action suits a decision that court observers said could hurt consumers' ability to challenge companies in court."



This was an idiotic ruling that, unfortunately, will have precedential weight (as already illustrated in comments and articles by being cited as, well, having precedential weight). I've seen binding arbitration clauses in employment contracts, which are equally BS. They basically let a corporation pay a third party "neutral" arbitrator that is run for profit and not directly governed by our legal system decide how to go forward with the handling of a complaint on either side. This is unbalanced, as the arbitration company has a vested interest in pleasing the side with the most money (the corporation) to build up a reputation and stay in business. The fact that arbitration can be mandatory, allowing people to sign away their basic judicial rights, is asinine and incredibly dangerous regardless of the precedent that companies are trying to set.



"this really seems to be more a case of the collective gaming public getting riled up over something that has little, if any, consequence for them. "



This isn't about gamers and Sony, this is about consumer rights and all large companies (and as I will illustrate below, worker rights too).



"While you're unable to join a class action suit, there's nothing in the terms of service preventing individuals from suing Sony on an individual basis. "



Not yet. Let's see how far the companies dip their toes in these waters if we don't stand up against it.



"Additionally, since the PSN is a free service, Sony has a little (perhaps miniscule) more ethical leeway in adding this sort of a condition."



A little, yeah, but it is moot; I'm certain a fair number of people evaluated the PS3's ability to connect to PSN when purchasing it for its presented price (which has generally if not always been more than the other consoles), and I'm certain that everyone assumes full legal abilities to try to restore damages if the device or service causes harm (not just being unable to play games, but things like losing your personal information to hackers or the machine catching fire and burning down your apartment). If companies can willy-nilly remove our legal rights through long-winded and ever changing ToS's and EULAs which are sometimes in effect just by opening the product and which cost way too much time to read for all the devices we use, then consumers will have to be that much more attentive when buying things. Attention and reading ToS's cost time, which is a net loss for our society, all because some companies want, on top of the rights of individuals, the powers of dictators.



"In the entertainment world, though. Things generally don't work out so well. Let's look back: "



Lawsuits are about civil punishment to free up police efforts to ensure our society behaves morally; they are not a lottery to cash in on. The value of a lawsuit should not be measured by how much an individual profits from it, or a class, or lawyers (though I do agree that lawyers are overpaid), but by how much it punishes those that would do wrong and by how much it dissuades future potential wrong-doers from doing wrong. The scary thing about binding arbitration is that once some companies get away with it, other companies in the market will do so too to try to lower costs and stay competitive, then other companies in other markets will do so to get the competitive edge, then their competitors will do so to keep up, then some smart companies will lobby the government to try to take away even more rights (user agrees that we don't give a shit about their petty problems and will not sue us in any form). Best to curtail it now.



"And consumers weren't the winners there. Developers were. "



Class actions are not just about retribution for consumers; they are about retribution for a class of people whose rights were similarly infringed, which puts less of a burden on the court system and allows collective actions to somewhat tip the balance away from the rich, lawyer-riddled corporation.



"You can't have standing in a class action suit unless you're 18. "



Kids (rightfully) have a vested interest in the market pressures and precedence that will affect their rights when they do turn 18.



tldr: People are not making a big enough deal over binding arbitration, or corporate power-mongering in general.

David Lee
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Well stated.

Adam Bishop
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I really think people misunderstand the primary benefit of a class-action lawsuit - increased efficiency of the court system. The main reason that class action lawsuits exist is so that when a large number of plaintiffs are arguing essentially the same thing, the court can listen to the argument once on behalf of all of them so that resources aren't tied up adjudicating the same matter over and over again.

Joe Lagomarsino
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I thought the primary benefit was power to fight. Corporations can do pretty much whatever they want to me and I can't do much about it because I can't afford a lawyer that can fight their gaggle of lawyers. With a class action suit it's easier to get a good lawyer or multiple lawyers to fight for the case. The majority of the money won will probably go to the lawyers but I don't think the money is as important as setting the precedent in court for what is unacceptable from these powerful corporations.

Bart Stewart
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In fairness, let's consider the other perspective.



IANAL, but as I understand it the purpose of civil suits, including class action suits, is not to penalize supposed criminal activity. Attorneys general in the states and at the federal level are empowered to bring criminal proceedings where the evidence supports such action.



Civil suits are meant to make individuals whole from damage done to them as individuals. For that purpose, the Supreme Court since about 1925 has been finding that arbitration between individual entities (what the Court calls "bilateral" arbitration versus "class" litigation) is an acceptable vehicle for pursuing this valid interest in providing appropriate restitution to individuals who can show that they have been injured.



The Concepcion case simply makes this position plain. Where a reasonable path to arbitration is provided, that process is held to be more effective at restoring individuals than a class action vehicle. As the Court put it in section (d) of the Syllabus for the Concepcion ruling, "Class arbitration ... interferes with fundamental attributes of arbitration. The switch from bilateral to class arbitration sacrifices arbitration's informality and makes the process slower, more costly, and more likely to generate procedural morass than final judgment."



The Court then found (in the common 5-4 split) that AT&T's contract provisions did provide adequate opportunity for individuals to have their claims against AT&T arbitrated. So if someone feels that Sony -- or any other individual or company in its contract terms -- doesn't adequately allow arbitration for individual claims, then they can bring a suit on those grounds. In fact, the Concepcion ruling actually provides a path for individuals to bring a suit as a class action as long as they can show that the contract's arbitration terms don't meet the requirements of the Federal Arbitration Act.



The purpose of law is justice. Latching on to a particular vehicle for delivering commensurate justice for damages done regardless of whether some other approach is more effective -- as the Court claims in Concepcion -- leads to people defending one particular tool (as at http://www.scotusblog.com/2011/09/do-it-yourself-tort-reform-how-
the-supreme-court-quietly-killed-the-class-action/ , not to mention in some of the comments here) at the expense of justice overall.



If someone (Sony, for example) takes your money and you don't get what you expected for that money, you are still fully capable of recovering reasonable restitution, either through arbitration if the contract provides for that or (potentially) as a class if the contract does not provide for arbitration. If Sony or anyone else does something that is intended to do harm to people, then the criminal justice system exists to punish them for that wrongdoing.



A legalism that arguably makes it *harder* for individuals to be make whole when harm is done to them as individuals -- which, again, is the purpose of civil law -- doesn't deserve the level of defense it's being given here. People don't have to agree with that (I certainly don't expect the folks who've commented so far here will ;), but I think it's at least a reasonable conclusion based on what's actually in the words of the Concepcion decision.

Lyon Medina
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Excuse me for this, but the **** just hit the fan.



I think this is a mountain out of a mole hill situation. Only because the gaming public doesn't know how to deal with it. I am not saying anything toward the situation its self. People have rights, and so do businesses. If you don't like it don't use the service.



If you have a lot invested right now, do a petition, refuse to sign the new agreement, ask for a refund, sell the console for scrap, and cut your losses if you need to. Which is not easy, I am not saying it is. Just saying people have options.



To be clarified I am not for Sony or the consumer in this case. But on a personal note. Low blow Sony regardless of your rights as a business.

Eric Feliu
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I think what is most insulting is Gamasutra felt the need to "educate" gamers. We all have our opinion on the matter and no amount of damage control from Gamasutra is going to change that. I feel Gamasutra is best when it presents facts and does not try to influence it's readership.

Bart Stewart
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Eric, this piece is clearly labeled as "Opinion" right in the subject line.



I have my own diagreements with the way that straight news stories are sometimes shaped by the writer's personal beliefs. (At least when they don't match my personal beliefs. ;)



But if that kind of commentary can be kept in opinion pieces and plainly labeled as such, is that still a problem?

Lyon Medina
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Only if your name is Eric apparently.

Eric Feliu
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I know it's an opinion piece. That's my point. I don't want to read opinions on a "news" sight. Gamasutra is obviously trying to help with Sony's image and I have a problem with that. I get enough opinions on this site from reader comments.

Jeffrey Crenshaw
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"I don't want to read opinions on a "news" sight."



Easiest remedy for that is to avoid reading any article whose title starts with "Opinion: ". More prudently, you seem to think that Gamasutra is in collusion with Sony for some reason. I don't see how Chris Morris represents the entirety of "Gamasutra", nor do I see how his opinion piece is foul play.

Eric Feliu
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It's hard to avoid opinion pieces when they show up in the main news feed for the site. I may have not even noticed the "Opinion" part of the headline when I first read the piece. To be honest I am not sure that "Opinion" was there when I first read the article and who is to say it was there initially? The point is articles can be modified after they are posted.



Can anyone post a story on this site and it will show up in the main news feed? I think not, so yes someone who posts an article that shows up in the Gamasutra feed represents all of Gamasutra in my opinion. I am not saying there is collusion with Sony. I do get suspect of any news site that publishes opinion pieces that appear to defend any company.


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