Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
September 18, 2014
arrowPress Releases
September 18, 2014
PR Newswire
View All





If you enjoy reading this site, you might also want to check out these UBM Tech sites:


New Xbox 360 TOS Seeks To Block Class Action Lawsuits
New Xbox 360 TOS Seeks To Block Class Action Lawsuits
December 7, 2011 | By Eric Caoili

December 7, 2011 | By Eric Caoili
Comments
    9 comments
More: Console/PC, Social/Online, Business/Marketing



Mimicking Sony's move to block class action lawsuits from PlayStation Network users, Microsoft updated its Xbox 360 terms of services to prevent U.S. owners from taking the company to court.

In its major dashboard update rolled out for Xbox 360 yesterday, Microsoft amended the TOS that all owners must agree to before using the console, adding new language purporting that they are giving up their right to file lawsuits against the platform holder.

The new TOS section reads:
"If you live in the United States, you and Microsoft agree that if you and Microsoft do not resolve any dispute by informal negotiation ... any effort to resolve the dispute will be conducted exclusively by binding arbitration in accordance with the arbitration procedures in Section 18.1.7.

You understand and acknowledge that by agreeing to binding arbitration, you are giving up the right to litigate (or participate as a party or class member) all disputes in court before a judge or jury.

Instead, you understand and agree that all disputes will be resolved before a neutral arbitrator, whose award (Decision) will be binding and final, except for a limited right of appeal under the federal arbitration act."
It also includes a clause claiming that users are waiving their rights to join an Xbox 360 class action lawsuit targeting Microsoft. The company has suffered several class action suits over the years, most recently over alleged double-billing on Xbox Live.

By limiting consumers' ability to join class action lawsuits, Microsoft could potentially save itself a significant amount of money, as it would pay only a fraction of individual users affected by a particular issue, instead of the millions who could opt into a class action.

Sony instituted similar language into its PSN terms three months ago with a new "Binding Individual Arbitration" section, though it also offered an option allowing users to opt-out of the clause by sending a physical letter to the company.

It pointed to a recent controversial Supreme Court ruling -- allowing AT&T to block employees from filing class action suits against the carrier -- to explain its decision: "The Supreme Court recently ruled in the AT&T case that language like this is enforceable."

"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."

Sony notably updated the terms five months after a federal class action suit was brought against the company for a security breach exposing users' personal information to hackers that attacked the company's online services, including PSN, earlier this year.

Several state governments aren't comfortable with these kind of clauses, though, as Kotaku points out. Illinois has ruled that consumers must always have the right to pursue legal action, and Ohio and New Mexico are both currently investigating the issue.


Related Jobs

Mixamo
Mixamo — San Francisco, California, United States
[09.18.14]

Animation Outsource Manager
Phosphor Games Studio
Phosphor Games Studio — Chicago, Illinois, United States
[09.18.14]

Game Producer
Trion Worlds
Trion Worlds — Redwood City, California, United States
[09.18.14]

Senior Gameplay Engineer
Heavy Iron Studios, Inc.
Heavy Iron Studios, Inc. — Los Angeles, California, United States
[09.18.14]

Game Programming Intern










Comments


Martain Chandler
profile image
I'm way overdue for incorporating myself and adding a similar EULA to my business card.

Kevin Reilly
profile image
Federal Arbitration Act pre-empts state law on the enforceability of arbitration clauses. Doubt Illinois law would survive pre-emption claim.



FYI - the AT&T v. Concepcion case was a consumer action involving the carrier's TOS, not a class action brought by employees. That is a separate case out of the 9th Circuit.

Duong Nguyen
profile image
Well at least Europeans still have the right to sue corporations..The last bastion of freedom..Shows how far the US supreme court has fallen to allow such a ruling..

Eric Geer
profile image
Can I make companies sign my terms and conditions?...I mean as much as I am using their device, they are using me...

Lyon Medina
profile image
Now I defended Sony on this issue, I shall defend Microsoft (and any other business, even though I don't need too, and they donít need me too.) on the issue as well. It is well within a businesses right to have the right to defend itself. It is no different from the right for a person to smoke or drink when they are buying a product they know comes with risks. "Especially" if they make you sign a contract or terms of service clause.



If you do not like it don't buy the product or its services, (I wish I could end here.) but if you already bought the product like I have. And I have a lot invested in Microsoft right now. I have two choices. Continue trusting the product. Or seek to change their minds on the issue.



Now if there was a petition? I would sign it. Would I hold Microsoft accountable for something to go wrong when I purchase their product? Yes I would. Would I be angry? Yes I would, would I sue them? No. Why? So I can get waste my time. Just because you have the ability to sue someone or a business doesn't mean you should.



I am not for the business in this matter. This is a really "dumb" move for Microsoft because Microsoft always takes care of its consumers until the consumers become the problem. Hackers, cheaters, thieves, the bad kind of modders, racists on live.



I have never had a problem with Microsoft and the X-Box that they never did handle the right way. I have had a lot of problems, a lot I have been compensated very much well off and given enough for my troubles.



Just so people know though cause people are going to ask.



Credit Card info stolen, Account stolen, Seven replacement X-box (Five RROD, One disk tray error, another just never turned back on. They replaced every single one. No charge to me.)



If you don't trust the business to take care of you when things go wrong, you shouldn't be associated with them. Business is about trust and some of you need to learn to grow up and understand things are going to go wrong from time to time.



Microsoft is not saying they will not handle the problems that come around.



"Instead, you understand and agree that all disputes will be resolved before a neutral arbitrator, whose award (Decision) will be binding and final, except for a limited right of appeal under the federal arbitration act."



You can still hold them accountable, their not making themselves closed to paying for the problems they cause, and need to fix.



So much more I want to say but I'll leave it at this. I could write a book on this matter, but I am trying to keep it as short as possible.

Evan Combs
profile image
"It is well within a businesses right to have the right to defend itself. It is no different from the right for a person to smoke or drink when they are buying a product they know comes with risks."



There is a difference between having a warning of something specific to avoid legal issues, and making a generic blanket statement.

Lyon Medina
profile image
@Evan



What I mean by that statement is that everyone and every business has choices and rights to do anything that they wish. With the laws approval or disapproval.



If I want to drink and drive, that is my choice. Its agaisnt the law every where you go, but it doesn't mean people cannot still do it if they choose too.



If Microsoft wants to limit its consumer base to not allowing them to collect into one base for a class action law suit, it is well within in their right to restrict that. The consequence is they may lose some of their user base, which is a risk they are apparantly willing to take.

Hakim Boukellif
profile image
@Lyon

Mistakes and incidents aren't the only reasons for a lawsuit. There can also be cases where Microsoft chooses for something to happen that negatively affects me, but I could not foresee happening on the moment I decided to go "in business" with them. You could argue that I shouldn't have gone in business with them if I didn't trust them enough to not make decisions like that, but the trust between producer/provider and consumer/user isn't that deep (nor should it be). If that level of trust were required, no one would ever buy any products or join any services, as both parties act first and foremost in their own interests.



Of course, a lawsuit should never be your first resort, but you should still have the right to start one and no company should have the right to take that right away.



"You can still hold them accountable, their not making themselves closed to paying for the problems they cause, and need to fix."

Yes, but it'll be on their terms. Even if the arbitrator is neutral, the fact that they could limit the method of dispute resolution to just that already puts things in their favour.



"What I mean by that statement is that everyone and every business has choices and rights to do anything that they wish. With the laws approval or disapproval."

What a strange thing to say. Do citizens in North Korea have the right to publicly criticize the government, just because they're capable of doing so, despite the fact that they'll be taken away by someone in uniform soon after? If so, the word "right" is pretty meaningless.

Harry Fields
profile image
Today, in a total act of lunacy, I actually read through the entire Eula as I was updating one of my xboxes. It's laughable how much work lawyers create for eachother... at very lucrative rates.


none
 
Comment: