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Questioning Sony's new class-action waiver

Sony is removing right for consumers to join class-action suits against many of its online services. But with recent breaches of Sony networks, and lengthy PSN downtime, still fresh in many minds, is this a branding blunder?

Are you entertained yet? Sony Network Entertainment

The Sony Network Entertainment has added a controversial change to its Terms of Service and User Agreement (PDF) for users of the PlayStation Network and the Sony Entertainment Network (Music Unlimited, Video Unlimited). In the revised terms, consumers must waive the right to participate in any class-action lawsuit filed after August 20 against the gaming and content delivery portion of Sony.

If you don't agree, then your PS3 can't get online or purchase media content from Sony. Future disputes between consumers and SNE must occur individually in court or through an arbitration procedure.

Licensing agreements with restrictions like this are actually more common than you might think. In fact, the U.S. Supreme Court ruled in favor of class-action waivers last April in AT&T Mobility LLC v. Concepcion. In that case, the court held that federal law pre-empted state rules against class-action waivers. Sony will have difficulty enforcing this policy outside of the U.S., as some other countries make agreements like this impossible.

Regardless, Sony's inclusion of a class-action waiver could not come at a more delicate time for the company's reputation. A summer of discontent from multiple intrusions into Sony networks and lengthy PSN downtime is still fresh in the minds of many.

The sheer scope of the recent hacking scandal--which compromised the personal information of millions of consumers across many divisions of Sony--was a huge smudge on the already fading shine of the Sony brand. In the damage-control department, Sony issued multiple apologies and the promise of a strengthened network, along with giving affected users a $1 million dollar identity theft insurance policy and free games. It also gave all PSN members affected by the outage access to PlayStation Plus for a month.

CNET contacted Sony about the new class-action waiver and received a rather ambiguous, yet still helpful, response.

"This updated language in the [terms of service] is designed to benefit both the consumer and the company by ensuring that there is adequate time and procedures to resolve disputes," said a Sony representative. "There is also a section of the TOS that educates users on how they can opt out of this portion" of the agreement.


The entire clause and opt-out information is found in Section 15 of the terms of service. Here is the direct information that lets you back into any future class-action lawsuits regarding PSN and Sony's other online entities.

If you do not wish to be bound by the binding arbitration and class-action waiver in this section 16, you must notify [Sony Network Entertainment] in writing within 30 days of the date that you accept this agreement. Your written notification must be mailed to:

6080 Center Drive, 10th Floor
Los Angeles, CA 90045
Attn: Legal Department/Arbitration

The notification requires your name, address, PSN account number (if applicable), and "a statement that you do not wish to resolve disputes with any Sony entity through arbitration," according to the terms of service. Because this process requires an actual paper document and the use of snail mail, there's a premade form available for download on Google Docs.

Do you think most consumers will bother with the snail mail and opt-out, or even know about the change?

(Via the BBC, Gamasutra, and The New York Times)