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Sony Amends Online Terms To Block Class Action Lawsuits

Sony Amends Online Terms To Block Class Action Lawsuits

September 15, 2011 | By Mike Rose

Sony this week revised the terms of service and user agreement for its online services, inserting a new section that states users cannot enter into a class action lawsuit against Sony unless Sony agrees to the initiation.

The move comes months after Sony's online services, including PlayStation Network, were compromised by a cyber attack that left millions of accounts compromised. The first class action over the breach was filed in April this year.

The new section of the terms, titled "Binding Individual Arbitration," explains that users must waive the option to open a class action lawsuit against the company regarding its online services.

"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 general action," it explains.

The terms add that users cannot conduct a class action suit "unless both you and the Sony entity with which you have a dispute specifically agree to do so in writing following initiation of the arbitration."

The clause notes that any person who has filed a class action suit against the company before August 20 can proceed to do so. PlayStation users will be prompted to accept the new terms the next time they log in to PSN.

Sony said in an email to PSN users, "If you do not agree with the new TOS or Privacy Policy, or if you do not wish to enter into an agreement with [Sony Network Entertainment], you may decline the TOS and Privacy Policy and we will close your account and return your funds."

Sony's online customers also have the option to send a written letter to Sony to opt-out of the clause, and forgo arbitration (an out-of-court option for dispute resolution). The opt-out must take place within 30 days of accepting the new terms.

The new section also adds that a clause -- or the entire section -- might not stand up in a court: "If the Class Action Waiver clause is found to be illegal or unenforceable, this entire Section 15 will be unenforceable, and the dispute will be decided by a court and you and the Sony Entity you have a dispute with each agree to waive in that instance, to the fullest extent allowed by law, any trial by jury."

The new clause comes after an online security breach earlier this year, which led Sony to shut down online services including PlayStation Network, and compromised around 100 million user accounts.

Following the breach, the Rothken law firm in April filed a federal class action lawsuit against Sony Computer Entertainment America on behalf of the 77 million PSN customers it says were harmed by "one of the largest data breaches in the history of the internet."

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