New Sony terms of service: customers cannot engage in class-action lawsuits

Sony doesn’t like being sued – especially by a group of folks acting in concert. So it’s done what any giant, multinational company would do to sidestep future class-action litigation: tell customers they just can’t do it. Starting today, those who plan to continue using the PlayStation Network and other Sony online services must agree to a new Terms of Service and User Agreement which denies them the right to engage in class-action proceedings against the company.

New Sony terms of service: customers cannot engage in class-action lawsuits

Version 12 of Sony’s Terms of Service and User Agreement (.pdf) dated September 15th, 2011 includes the following “Binding Individual Arbitration” clause:

Any dispute resolution proceedings, whether in arbitration or in 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, unless both you and the Sony entity which you have a dispute specifically agree to do so in writing following initiation of the arbitration. This provision does not preclude your participation as a member in a class action filed on or before August 20, 2011.

The clause is no mere suggestion. According to game industry news site Gamasutra, Sony sent PSN members an email which stated that customers who refuse to agree to the new terms will have their accounts unceremoniously closed and any remaining funds in them at the time reimbursed.

Sony also made it clear that changing the User Agreement for its online services at any time and for any reason is well within its rights.

“SNEI, at its sole discretion, may modify the terms of this Agreement at any time, including imposing a fee for creating PSN accounts. By accepting this Agreement or by accessing Sony Online Services, you agree to be bound by all current terms of the Agreement,” reads the document.

The addition of the waiver is not surprising; Sony is no stranger to class-action suits.

A few years after it launched the immensely popular PlayStation 2 console, the company was hit with a class-action suit over defective units. Sony eventually settled out of court, though maintained its innocence. In 2005, it faced one for including rootkit-based DRM on CDs. And last year aggrieved Linux users sued the company for removing the functionality from the PlayStation 3 via firmware update.

2011 has been no less litigious for Sony.

In April, the company suffered a massive security breach from an unknown cyber attacker. It notified around 77 million PlayStation Network members that their personal information – including names, addresses, passwords and possibly credit card numbers – was compromised by the server intrusion.

A week after Sony shut down the service, Alabama resident Kristopher Johns filed a class-action lawsuit over the breach against Sony, citing “breach of warranty, negligent data security,violations of consumers’ rights of privacy, failure to protect those rights, and failure and on-going refusal to timely inform consumers of unauthorized third party access to their credit card account and other nonpublic and private financial information.” Canadian law firm McPhadden Samac Tuovi LLP launched one on behalf of a single Ontarian, Natasha Maksimovic, in May.

MyCE reached out to Abigail Phillips, Senior Staff attorney at the Electronic Frontier Foundation, regarding the legality of the new clause. This post will be updated should she issue a comment. (via IGN)

Will you sign off on the waiver, or shut down your PSN account in protest? Let us know in the comment section.