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Controversial Supreme Court Ruling Fueled Sony's TOS Changes

Controversial Supreme Court Ruling Fueled Sony's TOS Changes

September 21, 2011 | By Frank Cifaldi

Last week's changes to Sony's online services user agreements that blocked class action lawsuits was spurred by a recent U.S. Supreme Court ruling, the company recently admitted.

The updated online terms last week said that by agreeing, consumers waive their rights to be represented as part of a class, and that any dispute resolution proceedings "will be conducted only on an individual basis."

Speaking to CNN, a Sony representative confirmed the suspicions of some analysts: the new terms were made in response to a U.S. Supreme Court decision that allowed AT&T Mobility to block employees from bringing class-action suits against the company as part of their hiring papers.

"The Supreme Court recently ruled in the AT&T case that language like this is enforceable," a spokeswoman told CNN. "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."

In reality, the clause saves Sony a lot of money in the event of another widespread legal dispute. While a class-action suit could cost the company millions in miniscule payments to individuals who opt in, this new clause means that complaints would have to be handled individually through arbitration, a much less likely scenario.

The terms include an option for users to opt-out of that specific clause by sending a physical letter to the company, a move experts say could win the company sympathy should it ever have to defend the clause in court.

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