9 ms·

Sony sued over PSN "can't sue us" clause

174 points by ukdm 15y ago

nik_0_0 15y ago
Maybe I'm incorrect, but I recall reading (when Sony first implemented this clause) that Sony was only doing so because there was another company that provided a similar case in court, and won, and therefore they had precedent, etc. In that case it also explains why Microsoft also is able to introduce it, that being when something like this happens, they are able to refer to the original court case. I'm interested to see how this turns out.
georgemcbay 15y ago
Xbox 360's latest dashboard update has a revised TOS that includes a very similar clause. I'm a big fan of the Xbox 360, but I wouldn't mind seeing Microsoft get hit by this as well. As much as I like the Xbox 360 and Xbox Live products, I hate this increasing practice of revising the TOS as part of an update which, because of the design of the system, is essentially a required update unless you want to turn the product you already own into a brick (game updates often require the latest system updates to be present, playing games online require the latest game updates, basically you either have to update or the system quickly becomes totally useless, and you can't update without "agreeing" to the new terms).
- bittermang 15y ago
  Especially with no refund option. If I don't agree to the new software terms, I can't sent the console hardware back to Sony/Microsoft. But I've always questioned the legality of waiving your legal rights in such a manner. It's always seemed paradoxical to me, at best. Using the systems provided by the courts against me to ensure I have no further recourse in using the courts against them.
  - Florin_Andrei 15y ago
    I see no paradox. Their legal funds are larger than yours, so they can do whatever they want.
    - CaptainZapp 15y ago
      Uh no; they can't. Or more precisely: It probably very much depends on the jurisdiction (or country). The absolute fundamental basis of contract law (at least around here, but I strongly suspect this to be a more or less universal concept) is that a contract is negotiated in good faith from both parties. I'd wager (and no IANAL) that a bait and switch scheme (and it's exactly that when a contract is suddenly unilaterally changed on the whim of one party) is fundamentally contradictory to this very concept and thus invalid. Sure: They try it anyway, but I would be very, very surprised if such a scam is upheld by a court.
  - dhimes 15y ago
    It especially pisses me off when one group (Apple) does it and I am also financially bound to AT&T so I can't even walk away. Those need to be decoupled: Apple changes their TOS, I refuse, and thus I am released from my AT&T contract. That, I believe, would at least slow down these changes for the coupled contracts.
    - subway 15y ago
      You could always buy the device outright instead of letting AT&T subsidize it.
  - danssig 15y ago
    Well, certain rights can't be signed away. I really suspect this is one of them. If you stand in front of a Jury and say "yes, I signed it. I couldn't use what I paid good money for if I didn't!" all 12 of them are going to feel your pain.
wvenable 15y ago
It shouldn't even be legal to be able to give up your right to sue.
- timwiseman 15y ago
  I must respectfully disagree. It can be a significant and useful feature of a contract fully negotiated by parties of equal bargaining power and it comes up quite frequently as something desired by both sides in contracts between sophisticated entities like businesses. I do however find clauses like this absolutely abhorrent in a take it or leave it contract where the bargaining power is grossly uneven. I find it even more disturbing when such contracts are essentially presented after the fact, such as when printed on the back of a ticket or...included as part of a mandatory update for a system you purchased long ago and can no longer return.
  - repiret 15y ago
    This. I feel that the law should make a sharp distinction between "a contract fully negotiated by parties of equal bargaining power and it comes up quite frequently as something desired by both sides in contracts between sophisticated entities" and the sort of cookie-cutter fine-print contracts that consumers are presented with. One should be able to agree to very broad things in a fully negotiated contract. Consumer contracts, on the other hand, should be quite restricted both in power and in length.
- st3fan 15y ago
  It probably isn't. But that doesn't mean they can't put it in the terms. Now you have to fight two things. First the terms and then the thing you are actually suing for. How convenient. Most people give up at the thought of that. Hopefully this will set a precedent.
- A1kmm 15y ago
  Not in advance of the dispute arising anyway. Example of a law that makes arbitration clauses unenforceable against consumers in New Zealand unless they agree otherwise after the dispute arises: http://www.legislation.govt.nz/act/public/1996/0099/latest/DLM405701.html http://www.legislation.govt.nz/act/public/1996/0099/latest/D...
fosk 15y ago
It is ridiculous that a company like Sony, can't guarantee the minimum effort into delivering a secure product to its customers. My opinion is that it's not important if the clause will stay or not, because the reputational damage for only trying to introduce it, it's a complete failure for them for one simple reason: it's dishonest. Sony, Microsoft, EA, etc. stop abusing our patience and please deliver a great, secure, product like it's meant to be.
- jamesbritt 15y ago
  I wish the reputation damage was real but dispite past transgressions by Sony I see no decrease in fawning over whatever new cool product or movie they release. Even tech sites that should know better complain about Sony in one post while promoting their products in another.
  - vilya 15y ago
    For what it's worth, I'm one customer they've driven away. Their handling of the hacking attack was the final straw for me: it finally convinced me that continuing to buy things through PSN would be unwise. I bought an Apple TV as a replacement for online movie rentals and although I still buy PS3 games it's in-store now rather than online. So far it's working out great!
    - uptown 15y ago
      I haven't knowingly bought a piece of Sony hardware or audio since their root-kit fiasco. In fairness, based on their products, they haven't really made this difficult to commit to.
      - Terretta 15y ago
        Agreed, seems like you're not missing much. Sony gear I bought in the 80s and early 90s still works. Sony gear I bought in the last decade has already failed, usually in under 5 years. I quit buying it, as it doesn't seem like it's made by the same company.
billybob 15y ago
I have a small fantasy of somehow forcing a company to agree to MY terms and conditions. "By accepting this payment, you agree that..."
- dhimes 15y ago
  LOL I have the same fantasy...a tiny written statement on the back of a check or inserted into a payment envelope...
- jasonlotito 15y ago
  They do this. If the terms they present don't match the terms you present, you can refuse to pay them. Oh, I understand what you are saying. And in truth, you could propose this. You could contact them with a counter proposal, and they'd probably just turn you down. What would be interesting is a service that defines your default conditions in an easy to parse manner. You could then provide it to the service, and it could tell you quickly whether it met your needs, etc.
  - Florin_Andrei 15y ago
    A better solution would be a political and legal reform, so crap like this from the heights of $$$ stops "trickling down" on everyone else.
- te_platt 15y ago
  It would be difficult but possible to organize a user's union that accepted/denied terms as a group. Something like a better business organization for software services. Hmmm -- the more I think about it the difficulties increase and the possibility decreases.
- ja30278 15y ago
  I wonder if a payment provider (Visa, Amex, etc) could insert consumer friendly terms into their merchant agreements.
  - saurik 15y ago
richardburton 15y ago
I have never understood those clauses in contracts that force any settlements to go straight to administration. How is that legally possible?
- chc 15y ago
  How is it possible to promise in a contract that you will not do something you would otherwise be legally entitled to do? Well, that's half the point of a contract. You may as well say, "What's with this clause in the contract that says Sony can't sell our data to scammers? How is that legally possible?" The real problem IMO is the circumstances under which the clause is presented, not the basic idea of arbitration.
  - richardburton 15y ago
    I had never thought of it that way. I guess the distinction I am making in my head is between the contract and the way in which the contract is enforced. I have always felt uncomfortable when those two circles have overlapped.
nextparadigms 15y ago
Sony should win the "most suicidal company of the year" award.
- cryptoz 15y ago
  Tied with RIM.
  - redthrowaway 15y ago
    And Nokia. And, arguably, Netflix. We'll call it "The Digg Awards".
    - SquareWheel 15y ago
      HP already won last years.
    - Xylakant 15y ago
      Let's go for "The Delicious Digg Awards".
johngalt 15y ago
General Motors finds flaw in one of their engine designs putting millions at risk. It responds by requiring all drivers to waive their right to sue, or they will send an engine kill signal through onstar.
- hkmurakami 15y ago
  I wonder just how much the consumer electronics industry considers lawsuits against them when deploying technology, TOS, or really anything to the customers. Back in the day when I was in the auto industry, I noticed that my managers were incredibly conscious of the potential lawsuits when considering any product, technology, or service. When BMW deployed tire air pressure monitors in their cars, my manager commented, "I wonder if they've considered the possibility of lawsuits coming their way when one of those systems fail to notify a low tire pressure, and the customer gets into an accident". Do you think it possible that the consumer electronics companies are more complacent with respect to lawsuits from the customer, because their products and services can never threaten people's lives, and hence will rarely trigger a drastic and catastrophic legal response?
- Maxious 15y ago
  More like you can now not drive on the highway. You can drive around in the suburbs (single player) but if you had a house far way (PSN+, XBL Gold) you can't get a refund even though you prepaid a years worth of rent.
rayiner 15y ago
It's not exactly a "you can't sue us" clause, but more like a "you agree to arbitration" clause. Courts will generally not construe such clauses to prevent suit in situations like if your XBox explodes and injures you, but thanks to the good old boys in Congress (fueled by conjured fears of frivolous litigation) and the laws they've passed endorsing arbitration rather than litigation, courts give more effect to such clauses than they otherwise would.
Natsu 15y ago
This is why I don't buy Sony products. I just bought a new TV two days ago, rejecting a Sony TV. I have no regrets; I found a better TV after a little more looking. Sony has lost thousands of dollars from me alone due to crap like this.
finnw 15y ago
I wonder if anyone has tried returning an electronic device to a retailer (could be a console, but also a printer or scanner) claiming it was unfit for its purpose, on the grounds that it would not work without drivers but the customer was unwilling to accept the EULA required to install the drivers.
roc 15y ago
It looks to me like Sony is being sued, not over the clause itself, but in their application of it and the circumstances surrounding it. That is, that it was patched in, bolted on toward the bottom of an agreement that is difficult to even read on a console, that the opt-out method is unnecessarily cumbersome, and that opting-out would take away an advertised feature of the purchased hardware with no recourse. Because the more general question of "is this clause even legal?" was famously settled not all that long ago by the SCOTUS in the AT&T Mobility case. http://lawprofessors.typepad.com/banking/2011/05/us-supreme-court-okays-binding-arbitration-clauses-prohibiting-consumers-from-joining-class-actions.html http://lawprofessors.typepad.com/banking/2011/05/us-supreme-...
- gareim 15y ago
  As I understand it, the AT&T case determined that clauses restricting consumers from engaging in class action lawsuits were legal. But in the Sony case, their clause restricts a consumer from suing in court and instead, must bring the arbitration to a neutral body (but not court). This scenario seems much more harmful and possibly infringes on a very, very important right.
  - roc 15y ago
    The AT&T case was not specifically about class until it hit the SCOTUS. The case was originally found for AT&T, with the court finding the clause was fine. The California Federal Circuit court reversed that decision, because it felt the clause was 'unconscionable' because it also signed away the right to sue as a class. The SCOTUS rejected that interpretation, upholding not only clauses that deny the right to sue as a class, but the arbitration clause itself.
minikomi 15y ago
Godel, Escher, Sony?
kermitthehermit 15y ago
I simply adore the irony of this. It's not like it wasn't expected. You can't just expect people to sit back and accept this. I hope they are forced to remove the "no sue" clause for good.

174 points by ukdm 15y ago

Maybe I'm incorrect, but I recall reading (when Sony first implemented this clause) that Sony was only doing so because there was another company that provided a similar case in court, and won, and therefore they had precedent, etc. In that case it also explains why Microsoft also is able to introduce it, that being when something like this happens, they are able to refer to the original court case. I'm interested to see how this turns out.

georgemcbay 15y ago

Xbox 360's latest dashboard update has a revised TOS that includes a very similar clause. I'm a big fan of the Xbox 360, but I wouldn't mind seeing Microsoft get hit by this as well. As much as I like the Xbox 360 and Xbox Live products, I hate this increasing practice of revising the TOS as part of an update which, because of the design of the system, is essentially a required update unless you want to turn the product you already own into a brick (game updates often require the latest system updates to be present, playing games online require the latest game updates, basically you either have to update or the system quickly becomes totally useless, and you can't update without "agreeing" to the new terms).

bittermang 15y ago
Especially with no refund option. If I don't agree to the new software terms, I can't sent the console hardware back to Sony/Microsoft. But I've always questioned the legality of waiving your legal rights in such a manner. It's always seemed paradoxical to me, at best. Using the systems provided by the courts against me to ensure I have no further recourse in using the courts against them.
- Florin_Andrei 15y ago
  I see no paradox. Their legal funds are larger than yours, so they can do whatever they want.
  - CaptainZapp 15y ago
    Uh no; they can't. Or more precisely: It probably very much depends on the jurisdiction (or country). The absolute fundamental basis of contract law (at least around here, but I strongly suspect this to be a more or less universal concept) is that a contract is negotiated in good faith from both parties. I'd wager (and no IANAL) that a bait and switch scheme (and it's exactly that when a contract is suddenly unilaterally changed on the whim of one party) is fundamentally contradictory to this very concept and thus invalid. Sure: They try it anyway, but I would be very, very surprised if such a scam is upheld by a court.
- dhimes 15y ago
  It especially pisses me off when one group (Apple) does it and I am also financially bound to AT&T so I can't even walk away. Those need to be decoupled: Apple changes their TOS, I refuse, and thus I am released from my AT&T contract. That, I believe, would at least slow down these changes for the coupled contracts.
  - subway 15y ago
    You could always buy the device outright instead of letting AT&T subsidize it.
- danssig 15y ago
  Well, certain rights can't be signed away. I really suspect this is one of them. If you stand in front of a Jury and say "yes, I signed it. I couldn't use what I paid good money for if I didn't!" all 12 of them are going to feel your pain.

wvenable 15y ago

It shouldn't even be legal to be able to give up your right to sue.

timwiseman 15y ago
I must respectfully disagree. It can be a significant and useful feature of a contract fully negotiated by parties of equal bargaining power and it comes up quite frequently as something desired by both sides in contracts between sophisticated entities like businesses. I do however find clauses like this absolutely abhorrent in a take it or leave it contract where the bargaining power is grossly uneven. I find it even more disturbing when such contracts are essentially presented after the fact, such as when printed on the back of a ticket or...included as part of a mandatory update for a system you purchased long ago and can no longer return.
- repiret 15y ago
  This. I feel that the law should make a sharp distinction between "a contract fully negotiated by parties of equal bargaining power and it comes up quite frequently as something desired by both sides in contracts between sophisticated entities" and the sort of cookie-cutter fine-print contracts that consumers are presented with. One should be able to agree to very broad things in a fully negotiated contract. Consumer contracts, on the other hand, should be quite restricted both in power and in length.
st3fan 15y ago
It probably isn't. But that doesn't mean they can't put it in the terms. Now you have to fight two things. First the terms and then the thing you are actually suing for. How convenient. Most people give up at the thought of that. Hopefully this will set a precedent.
A1kmm 15y ago
Not in advance of the dispute arising anyway. Example of a law that makes arbitration clauses unenforceable against consumers in New Zealand unless they agree otherwise after the dispute arises: http://www.legislation.govt.nz/act/public/1996/0099/latest/DLM405701.html http://www.legislation.govt.nz/act/public/1996/0099/latest/D...

fosk 15y ago

It is ridiculous that a company like Sony, can't guarantee the minimum effort into delivering a secure product to its customers. My opinion is that it's not important if the clause will stay or not, because the reputational damage for only trying to introduce it, it's a complete failure for them for one simple reason: it's dishonest. Sony, Microsoft, EA, etc. stop abusing our patience and please deliver a great, secure, product like it's meant to be.

jamesbritt 15y ago
I wish the reputation damage was real but dispite past transgressions by Sony I see no decrease in fawning over whatever new cool product or movie they release. Even tech sites that should know better complain about Sony in one post while promoting their products in another.
- vilya 15y ago
  For what it's worth, I'm one customer they've driven away. Their handling of the hacking attack was the final straw for me: it finally convinced me that continuing to buy things through PSN would be unwise. I bought an Apple TV as a replacement for online movie rentals and although I still buy PS3 games it's in-store now rather than online. So far it's working out great!
  - uptown 15y ago
    I haven't knowingly bought a piece of Sony hardware or audio since their root-kit fiasco. In fairness, based on their products, they haven't really made this difficult to commit to.
    - Terretta 15y ago
      Agreed, seems like you're not missing much. Sony gear I bought in the 80s and early 90s still works. Sony gear I bought in the last decade has already failed, usually in under 5 years. I quit buying it, as it doesn't seem like it's made by the same company.

billybob 15y ago

I have a small fantasy of somehow forcing a company to agree to MY terms and conditions. "By accepting this payment, you agree that..."

dhimes 15y ago
LOL I have the same fantasy...a tiny written statement on the back of a check or inserted into a payment envelope...
jasonlotito 15y ago
They do this. If the terms they present don't match the terms you present, you can refuse to pay them. Oh, I understand what you are saying. And in truth, you could propose this. You could contact them with a counter proposal, and they'd probably just turn you down. What would be interesting is a service that defines your default conditions in an easy to parse manner. You could then provide it to the service, and it could tell you quickly whether it met your needs, etc.
- Florin_Andrei 15y ago
  A better solution would be a political and legal reform, so crap like this from the heights of $$$ stops "trickling down" on everyone else.
te_platt 15y ago
It would be difficult but possible to organize a user's union that accepted/denied terms as a group. Something like a better business organization for software services. Hmmm -- the more I think about it the difficulties increase and the possibility decreases.
ja30278 15y ago
I wonder if a payment provider (Visa, Amex, etc) could insert consumer friendly terms into their merchant agreements.
- saurik 15y ago

richardburton 15y ago

I have never understood those clauses in contracts that force any settlements to go straight to administration. How is that legally possible?

chc 15y ago
How is it possible to promise in a contract that you will not do something you would otherwise be legally entitled to do? Well, that's half the point of a contract. You may as well say, "What's with this clause in the contract that says Sony can't sell our data to scammers? How is that legally possible?" The real problem IMO is the circumstances under which the clause is presented, not the basic idea of arbitration.
- richardburton 15y ago
  I had never thought of it that way. I guess the distinction I am making in my head is between the contract and the way in which the contract is enforced. I have always felt uncomfortable when those two circles have overlapped.

nextparadigms 15y ago

Sony should win the "most suicidal company of the year" award.

cryptoz 15y ago
Tied with RIM.
- redthrowaway 15y ago
  And Nokia. And, arguably, Netflix. We'll call it "The Digg Awards".
  - SquareWheel 15y ago
    HP already won last years.
  - Xylakant 15y ago
    Let's go for "The Delicious Digg Awards".

johngalt 15y ago

General Motors finds flaw in one of their engine designs putting millions at risk. It responds by requiring all drivers to waive their right to sue, or they will send an engine kill signal through onstar.

hkmurakami 15y ago
I wonder just how much the consumer electronics industry considers lawsuits against them when deploying technology, TOS, or really anything to the customers. Back in the day when I was in the auto industry, I noticed that my managers were incredibly conscious of the potential lawsuits when considering any product, technology, or service. When BMW deployed tire air pressure monitors in their cars, my manager commented, "I wonder if they've considered the possibility of lawsuits coming their way when one of those systems fail to notify a low tire pressure, and the customer gets into an accident". Do you think it possible that the consumer electronics companies are more complacent with respect to lawsuits from the customer, because their products and services can never threaten people's lives, and hence will rarely trigger a drastic and catastrophic legal response?
Maxious 15y ago
More like you can now not drive on the highway. You can drive around in the suburbs (single player) but if you had a house far way (PSN+, XBL Gold) you can't get a refund even though you prepaid a years worth of rent.

rayiner 15y ago

It's not exactly a "you can't sue us" clause, but more like a "you agree to arbitration" clause. Courts will generally not construe such clauses to prevent suit in situations like if your XBox explodes and injures you, but thanks to the good old boys in Congress (fueled by conjured fears of frivolous litigation) and the laws they've passed endorsing arbitration rather than litigation, courts give more effect to such clauses than they otherwise would.

Natsu 15y ago

This is why I don't buy Sony products. I just bought a new TV two days ago, rejecting a Sony TV. I have no regrets; I found a better TV after a little more looking. Sony has lost thousands of dollars from me alone due to crap like this.

finnw 15y ago

I wonder if anyone has tried returning an electronic device to a retailer (could be a console, but also a printer or scanner) claiming it was unfit for its purpose, on the grounds that it would not work without drivers but the customer was unwilling to accept the EULA required to install the drivers.

roc 15y ago

It looks to me like Sony is being sued, not over the clause itself, but in their application of it and the circumstances surrounding it. That is, that it was patched in, bolted on toward the bottom of an agreement that is difficult to even read on a console, that the opt-out method is unnecessarily cumbersome, and that opting-out would take away an advertised feature of the purchased hardware with no recourse. Because the more general question of "is this clause even legal?" was famously settled not all that long ago by the SCOTUS in the AT&T Mobility case. http://lawprofessors.typepad.com/banking/2011/05/us-supreme-court-okays-binding-arbitration-clauses-prohibiting-consumers-from-joining-class-actions.html http://lawprofessors.typepad.com/banking/2011/05/us-supreme-...

gareim 15y ago
As I understand it, the AT&T case determined that clauses restricting consumers from engaging in class action lawsuits were legal. But in the Sony case, their clause restricts a consumer from suing in court and instead, must bring the arbitration to a neutral body (but not court). This scenario seems much more harmful and possibly infringes on a very, very important right.
- roc 15y ago
  The AT&T case was not specifically about class until it hit the SCOTUS. The case was originally found for AT&T, with the court finding the clause was fine. The California Federal Circuit court reversed that decision, because it felt the clause was 'unconscionable' because it also signed away the right to sue as a class. The SCOTUS rejected that interpretation, upholding not only clauses that deny the right to sue as a class, but the arbitration clause itself.

minikomi 15y ago

Godel, Escher, Sony?

kermitthehermit 15y ago

I simply adore the irony of this. It's not like it wasn't expected. You can't just expect people to sit back and accept this. I hope they are forced to remove the "no sue" clause for good.