Friday, September 16, 2011

Sony Not Looking Good with Forced Arbitration in PlayStation Network TOS Update

Sony_psn_logo After suffering a huge outage due to a hacker breaching their network and compromising over 1 million personal and financial records of customers, Sony feels a little bit vulnerable.

How do they respond?

They add a forced-arbitration clause to their TOS aimed to prevent users from gathering together in class-action lawsuits to help cover Sony’s ass—in the event that, say 1 million people have their personal and financial records stolen from Sony by a hacker.

I wrote an article over at SiliconANGLE about the coverage we’ve seen appearing in UK media (specifically the BBC and The Register) but this doesn’t really look good for Sony because it works instead to shield them from civil justice when they wrong their customers. Go read, “Sony Dodges Behind Updated EULA to Avoid Responsibility for Future PSN Security Breaches,” to get an idea about what this means in the end.

At first glance, it seems like a corporation might want to defend themselves from class-action lawsuits because their expensive. But class-action lawsuits are difficult to put together; they’re not easy to generate, they take an actual systemic injury between a lot of different people, and generally judges don’t allow them unless there’s a good reason.

The only purpose of adding this sort of language to the TOS and EULA by Sony is to intimidate users into not suing them for what amounts to actual damages.

Sony is not sitting pretty today.

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