New PSN Terms of Service Means No Class Action Lawsuits for You

Posted by at 10:38 am on September 16, 2011

Following the PlayStation Network breach in April, a number of class action lawsuits were filed against Sony hoping to win some money after the personal information belonging to tens of millions of users was compromised.

Sony has sent out an email to users regarding a new Terms of Service and Privacy Policy, as well as to explain that Sony Network Entertainment America is transitioning into Sony Network Entertainment International. As soon as many people see “Terms of Service,” they likely hit agree button without reviewing a sentence of the clunky legalese these things are comprised of, but it would be a mistake to do so in this case. The email sneaks in a mention of why at the end of the first paragraph: “Please review all changes to the TOS and Privacy Policy carefully before indicating your agreement. In particular, please review Section 15 of the TOS, which now includes a class action waiver and requires that most disputes be resolved through arbitration.”

Checking out that section of the ToS, located here (PDF link), we see that it reads in part, “Other than those matters listed in the Exclusions from Arbitration clause, you and the Sony Entity that you have a Dispute with agree to seek resolution of the Dispute only through arbitration of that Dispute in accordance with the terms of this Section 15, and not litigate any Dispute in court. Arbitration means that the Dispute will be resolved by a neutral arbitrator instead of in a court by a judge or jury.”

The exclusions it refers to are any claims you may decide to file against Sony in small claims court. It goes on to state, “Class Action Waiver. 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, 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.”

It does note that you aren’t prevented from participating as a member of a class action lawsuit against Sony as long as it was filed no later than August 20, 2011. In other words, those aforementioned lawsuits we saw spring up in April, May, and June aren’t immediately going to lose many of their members when users agree to keep using PSN.

It is possible to agree to the Terms of Service and opt out of this binding arbitration. However, the process of doing so involves you mailing a letter to Sony’s California-based legal department within 30 days. Alternatively, you could cancel your PSN account and reserve the right to participate in a new class action lawsuit, but that’s obviously not an ideal solution.

For those wondering if this is all legal, it’s stated that even if one particular clause is found illegal or unenforceable, the remainder of the section will still be enforced.

“If any clause within this Section 15 (other than the Class Action Waiver clause above) is found to be illegal or unenforceable, that clause will be severed from this Section 15, and the remainder of this Section 15 will be given full force and effect. 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.”

It’s not inconceivable that judge will strike this down altogether. For the time being, though, it’s best to treat this as if that won’t be happening.

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