Was That Really Necessary, Sony?

Whilst I might be an unapologetic Sony fan boy even I can’t hide from their rather troubled past when it comes to customer relations. Of course everyone will remember their latest security incident which saw millions of PSN accounts breached but they’ve also had other fun incidents involving auto-installing root kits as copy protection and suing people into silence. Of course every corporation has its share of misgivings but Sony seems to have somewhat of a habit of getting themselves into hot water on a semi-regular basis with their actions. This week brings us another chapter in the saga that is the people vs Sony corporation, but it’s not as bad as it first seems.

Last week saw Sony update their PSN agreement which happens with nearly every system update that the PlayStation 3 receives. However this time around there was a particular clause that wasn’t in there previously, specifically one that could prevent class action lawsuits:

Sony has been hit with a number of class-action lawsuits since the launch of the PlayStation 3, mostly due to the decision to retroactively remove Linux support from the console and losing the data of users due to questionable security practices. Sony has another solution to this problem beyond beefing up security (and it’s not retaining the features you paid for): if you accept the next mandatory system update, you sign away your ability to take part in a class-action lawsuit. The only option left for consumers if they agree is binding individual arbitration.

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 LEGAL 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. THIS PROVISION DOES NOT PRECLUDE YOUR PARTICIPATION AS A MEMBER IN A CLASS ACTION FILED ON OR BEFORE AUGUST 20, 2011.

Accompanying that particular section is a clause that allows you to opt out of this particular section of the agreement but you have to send a snail mail letter to what I assume to be Sony’s legal department in Los Angeles. On the surface this appears to rule out any further class action suits that Sony might face in the future, at least in the majority of cases where people simply click through without reading the fine print. Digging through a couple articles (and one insightful Hacker News poster) on it however I don’t think that this is all it’s cracked up to be, in fact it might have been wholly unnecessary for Sony to do it in the first place.

The clause explicitly excludes small claims which can be up to thousands of dollars. Now I’ve never been involved in any class action suits myself but the ones I’ve watched unfold online usually end up with all affected parties receiving extremely small pay offs, on the order of tens or hundreds of dollars. If you take Sony hacking case as an example a typical out of pocket expenditure for a victim of identity theft is approximately $422 (in 2006), much lower than the threshold for small claims. Considering that Sony already provided identity fraud insurance for everyone affected by the PSN hack it seems like a moot point anyway.

Indeed the arbitration clause seems to be neither here or there for Sony either with the new clause binding both parties to the arbitrator’s decision, rendering them unable to contest it in a higher court. The arbitration can also occur anywhere in the USA so that people won’t have to travel to Sony in order to have their case heard. The clause also doesn’t affect residents of Europe or Australia further limiting its reach. All in all it seems like it tackles a very narrow band of potential cases, enough so that it barely seems necessary for Sony to even put it in.

Honestly I feel that it’s more that given their track record Sony has to be extremely careful with anything they do that could be construed as being against their consumers. The arbitration clause, whilst looking a lot like a storm in a teacup, just adds fuel to the ever burning flamewar that revolves around Sony being out to screw everyone over. Hopefully they take this as a cue to rework their PR strategies so that these kind of incidents can be avoided in the future as I don’t think their public image can take many more beatings like this.

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