MSFT Responds to Possible Xbox Live Suit

Last week we reported on the story that a U.S.  law firm was accepting submissions as part of a precursor to a possible class action lawsuit on behalf of users banned from Microsoft’s Xbox Live service.

AbingtonIP had put up a form on its website asking those affected by the ban for more information. The firm called the timing of Microsoft’s ban “convenient,” as it happened just before the release of Call of Duty: Modern Warfare 2 and may ultimately have resulted in an increase in subscriptions to Xbox Live.

A Microsoft Spokesperson is quoted in the Financial Post reiterating that the company is well within its rights in enacting the ban, “Piracy is illegal and modifying an Xbox 360 is a violation of the Xbox Live Terms of Use. Microsoft is well within its legal rights to ban these users from Xbox Live.”

Marc Whitten, General Manger of Xbox Live, told VentureBeat that the estimated number of Live members banned was way off and defended his company’s actions:

It’s a cat and mouse game. These were people that were pirating software. We try to keep sanctity of life from a safety and anti-cheating perspective and we protect our partners. We didn’t release the number. I cannot explain to you why people would think it was a million people. It wasn’t a million people. Check the veracity of that claim. It was one news source. I think we do a really good job understanding what people are doing on the system. That applies to intellectual property (piracy) and how we treat the community in terms of harassment.

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  1. 0
    JDKJ says:

    Once again, and as usual, your facts are wrong in many ways.

    First, I in fact completed three years of law school many years ago, successfully graduating with a Juris Doctor degree. Thereafter, I sat and passed the bar examinations of a number of jurisdictions and was duly admitted to practice therein as an attorney. I have now practiced law as an attorney for quite some, in which capacity I was involved in several high profile and precedent-setting cases, with many of which, if you’ve ever read a newspaper or watched something other than Saturday morning cartoons on television, you’ll be familiar. Indeed and ironically, one of those cases is that of United States v. Microsoft, an antitrust action (monopoly leveraging and product bundling) brought by the Department of Justice against Microsoft and in which I was involved in the successful defensive representation of Microsoft. One the other hand, I suspect, based on your frequent ignorance and misapprehension of the law, that you’ve never graduated from anyone’s law school. Rather, it appears that what knowledge of the law you have was acquired watching re-runs of "Matlock." Which would make you what’s called in the legal industry a "lay person." And which makes your opinion on legal matters what’s called in the legal industry "lay opinion."

    Second, you’ve apparently never heard of a pre-trial aspect of the litigation process called "discovery." This, my clueless friend, is when parties to a litigation are required, in response to so-called "discovery requests," to provide to their opposing party any information requested and which may be relevant to the outcome of the litigation, including, perhaps most importantly, matters which they intend to present as evidence at trial. Contrary to your assertion, during the course of a trial is not the first time that a party will be disclosing evidentiary materials. Evidentiary materials are usually disclosed long before a trial ever commences. In fact, failing to disclose evidentiary materials during the discovery process and prior to trial may be a basis for barring their introduction at trial because of the obvious unfair surprise and disadvantage to the opposing party.

    Third, it is not at all clear from or supported by the reportage that Microsoft banned the consoles at issue because those consoles were somehow involved in piracy or any other illegal activity. Rather, the only clear basis for the banning of the consoles which can be gleaned from the reportage and the numerous comments on blogsites by Xbox Live users, including users who claim to have been victims of the ban, is modification of the consoles.    

    I could go on and on and on and on but I think – or would certainly hope – that by now it’s beginning to dawn on you how much of a fucking idiot you are. If it hasn’t, just let me know and I’ll do whatever I can to make the point more clear to you.

    And I’m still waiting on you to cite me to your law which, as you claim, makes the mere possession of recording equipment in a theatre a crime. If you’ve now come to realize that in making this claim you were, once again, being nothing more than a fucking idiot, then please advise me accordingly and I’ll stop waiting. 

  2. 0
    jedidethfreak says:

    I know you think of yourself as Mr. Junior DA, but maybe you should actually FINISH law school, because MS doesn’t have to show any evidence to anyone until anything goes to trial.  Also, since Microsoft only banned the account from being active from a particular console, nobody lost anything, as XBOX Live accounts are tied to anything and everything involving Microsoft.  Also, I know you think that people shouldn’t have to accept any consequences to any wrongdoing (unless that person happens to run a corporation), but MS told them they were going to ban their account if they used their product for illegal purposes.  They were banned, supposedly for such.  

    You say that your glad the government doesn’t work in a way that finds people guilty as charged without an ability to defend themselves.  I find it funny that that’s exactly what you do to any and every corporation that is sued by just about anyone on this board.

    He was dead when I got here.

  3. 0
    JDKJ says:

    There are many computers, such as those provided for work or educational or research purposes, which allow access to some purpose-related Internet sites, such as a law firm’s website, but will block access to non-purpose-related Internet sites, such as a gaming site. The fact that someone was able to visit the law firm’s site from such a computer doesn’t necessarily mean that they can visit the gaming site from the same computer. Rather, it means that they can’t. Or, they may have stolen computer time from their employer to fill out the form. That doesn’t mean that they’re willing or able to steal computer time from their employer to play games. I could go on and on and on with any number of other scenarios which put the lie to the contention that because someone has the ability to fill out the form on the Internet, that means they also have the ability to visit Xbox Live and play games. Those two things don’t at all necessarily go hand in hand. And to suggest that they do is laughable. 

    And, frankly, I’m thoroughly over dancing around the same point with you. If you see no validity in the asserted possibility that there’s a colorable claim to be made for unjust enrichment, then that’s fine. We’ll just leave it at that. Rather than to keep saying the same things back and forth to each other ad nauseum.

    "Equity abhors a nit-picker" – traditional maxim

  4. 0
    Torven says:

    "And we should just assume that a subscriber with a banned console is bound to also have a computer and an Internet connection?"

    "And why would the fact that someone can fill out Abington IP’s contact form necessarily mean that they still have a way to access their Live account when the form is freely available at the firm’s website?"


    MSFT has not placed the subscriber in that position; knowingly or not, the subscriber has placed himself in that position.  The banned console is something that the subscriber agreed he would not use to connect to Live in the first place.  In other words, the initial use of the banned console was a violation of the contract.  The claim that Microsoft put the player in that situation would be contingent on the player having legitimate access in the first place.

  5. 0
    JDKJ says:

    They’ll need to, because thus far they’ve said absolutely nothing about determining as a fact that any piracy has indeed occurred. Merely throwing the word "piracy" around comes nowhere near to establishing the fact of piracy. And I’d be very interested in knowing how it is possible for MSFT to determine through nothing more than my console being connected to their service that I’ve pirated anything. That’s some bad-ass, snoopy-spy, high-tech, National-Security-Agency-type shit. I’m glad I don’t use Xbox Live. I’d hate to give MSFT the ability to peer up my asshole like that.

    And if you could point me to the law which you claim makes it illegal to merely posses recording equipment in a movie theatre, I’d appreciate it. But, perhaps, before you cite me to your law, you may want to first familiarize yourself with the legal concept of "mens rea" (i.e., "the guilty mind") and then re-read your law to make sure that it truly criminalizes mere possession of recording equipment in a movie theatre. I’d hate you see you, once again, make a fool of yourself with a less than perfect understanding of the law. 

  6. 0
    JDKJ says:

    I was completely unaware that possession of a modified game console was illegal. Is that under state or federal law? Or both? I wonder why MSFT isn’t reporting the banned subscribers to law enforcement for criminal prosecution? They should. To have knowledge that a crime has been committed and to not report that knowledge to the appropriate authority is itself a crime ("misapprehension of felon").

    Or are you talking about piracy? The piracy about which MSFT hasn’t said one single word which would tend to actually substantiate the allegation? Yes, I know you predict that if the matter goes to trial, MSFT will then put money where its mouth is but, until they do, perhaps you shouldn’t be so quick to assume that a totally unsupported allegation is the same as an indisputable fact.

    And only in the World of Microsoft, as far as I know, is it possible to accuse someone of criminal activity, offer absolutely no hard evidence of the alleged criminal activity (at least, not publicly), give the accused no opportunity to defend against the allegation, find them guilty as charged, and sentence them accordingly. I’m glad the government’s criminal justice system doesn’t work like that. That would suck.  

  7. 0
    JDKJ says:

    And we should just assume that a subscriber with a banned console is bound to also have a computer and an Internet connection? Why? Because an Xbox console is always bundled for sale with a computer and Internet access and, therefore, it is impossible to buy one without also buying the other? I didn’t know that. We should look into that further. I believe product bundling is a violation of antitrust law. If we bring an antitrust action as private attorneys general against the product bundler and win, we can collect treble damages. 

    And I believe you may be misusing the term of art "recission." To rescind a contract means to declare it void ab initio as if it was never made. I believe the term of art you want to use is "terminate." But, either way, that isn’t at all what I’m saying. What I’m saying is that once MSFT, as a practical matter, has placed a subscriber in the position of being unable to further derive the value of their bargain, they may owe that subscriber a refund of the unused value. Or, at least, that is what the doctrine of unjust enrichment says.    

  8. 0
    Torven says:

    You can access you Live account from any computer with an internet connection.

    Also, what you are saying is basically that the customers should be able to violate their contract with Microsoft and use that as grounds for rescission.

  9. 0
    jedidethfreak says:

    You still are free to do whatever you want to with something you own, so long as it isn’t illegal.  That’s the rub, as the people who’ve been banned are accused of exactly that.

    He was dead when I got here.

  10. 0
    jedidethfreak says:

    Did you read the story?  They said "piracy" in the story.  If it goes to trial, they’ll have to point out what was pirated and how they know.

    Also, because of piracy laws, having recording equipment in a theater is illegal (outside of a cellphone), punishable by a ten-thousand dollar fine and five years in prison.  Therefore, your analogy of demanding a refund after being thrown out for having recording equipment is absolutely no different than actually recording the movie.

    He was dead when I got here.

  11. 0
    JDKJ says:

    Precisely. Unless there’s some one giving away Xboxes for free when you buy a gallon of milk. If so, please let me know. I’ll go pick me up one of them. I’m really a PlayStation kinda guy but, shit, if it ain’t gonna cost me more than the price of a gallon of milk, might as well.

  12. 0
    Ratros says:

    You mean that people might not have the 400 big ones to buy a new system to access their account?  *gasp*  What a shocker.  *sigh*  I remember when you were free to do what ever the hell you wanted with what you bought without being wrongfully charged.

    I once had a dream about God. In it, he was looking down upon the planet and the havoc we recked and he said unto us, "Damn Kids get off my lawn!"

  13. 0
    JDKJ says:

    Why are you making me repeat myself ad nauseum? I can’t say the same thing in more than so many different ways. 

    Once they ban the subscribers’ console, the means by which they obviously were accessing their contracted service, be it an upgrade, a downgrade, or a sidewaygrade, there arises the distinct possibility that in many cases the subscriber will be left without a means of accessing that for which they’ve paid. It is pure glib for MSFT to say that they have merely banned the means of accessing the service and haven’t canceled the service and any upgrades thereto when that banned means is potentially the only means of accessing the service and upgrades thereto which a subscriber has at their disposal. What good does it do the subscriber to have the service and the upgrades thereto if they have no means of access? Does anyone ever sign up for the service and the upgrade thereto with the expectation of having nothing more than the potential to access the service and the upgrade thereto? Or is the essence of the bargain and the essential value derived therefrom something which is obtained only once the access has been successfully completed? I’d assume it’s the latter and not the former. Well, guess what? If they have no means of accessing the service and the upgrade thereto, then they have no means of availing themselves of that which lies beyond mere access and which is the essence of their bargain. As I have said before and repeatedly, those subscribers are left with a service and any upgrades thereto that for all practical purposes has no value to them.

    And why would the fact that someone can fill out Abington IP’s contact form necessarily mean that they still have a way to access their Live account when the form is freely available at the firm’s website? 

  14. 0
    Torven says:

    Except that your ability to access the live account is irrelevant to the service being provided.  You are not paying MS to provide a live account, that is done for free; you are paying them to apply an upgrade to an account.  Microsoft is still providing the contracted service, while the client has violated the contract.  How does that give the client grounds for rescission, particularly when Microsoft’s response to the violation was to continue to provide the service?

    Also I would point out that anyone who fills out Abington IP’s contact form for this lawsuit still has a means of access to their Live account.

  15. 0
    JDKJ says:

    It would be but for the fact that MSFT isn’t pointing to any confirmed instances of piracy or even attempted piracy. They’re only alleging that consoles were modified. Best as I can tell, that’s the only hard basis upon which they banned the consoles. Which makes the situation more closely analogous to demanding a refund from a movie theatre after you get thrown out for merely having recording equipment in your possession. 

  16. 0
    DarkSaber says:

    That’s like demanding a refund from a movie theatre after you get thrown out for trying to record the movie.


    I LIKE the fence. I get 2 groups to laugh at then.

  17. 0
    JDKJ says:

    I’ve said it before and more than once, but let me just go ahead and say it again: the banning of the modified consoles isn’t the salient issue. But thereafter refusing to refund subscription fees to those who seek refunds is the salient issue. Ban my console all you want because you think it’s been modified. Fine. I don’t care about that. Just give me the balance leftover from my subscription going forward and we won’t have a problem.

  18. 0
    Torven says:

    There is nothing technically about it.  The subscribers paid to have an xbox live account upgraded to gold status, period.  Other than that, Microsoft has not touched their account.  You don’t even need an Xbox to use it; I have used mine for more than a year and have never owned a Microsoft console.  And I don’t think it is unfair for Microsoft to disallow connections from unauthorized hardware (regardless of whether the modification was made by the current user or a prior owner), provided that condition is made clear prior to the purchase.

  19. 0
    JDKJ says:

    Would I have been better off citing as support for my position a wholly inapplicable law? As you just did? Pray tell, what’s the difference between citing to irrelevant law and citing to no law? I ain’t seeing the difference. Far as I can see, no law is of equal value to irrelevant law.

    But, since you apparently have a keen appetite for legal citation, let me provide you the following from Black’s Law Dictionary:

    "Unjust enrichment doctrine: General principle that one person should not be permitted unjustly to enrich himself at the expense of another, but should be required to make restitution of or for property or benefits received, retained or appropriated, where it is just and equitable that such restitution be made, and where such action involves no violation or frustration of law or opposition to public policy, either directly or indirectly. Tulalip Shores, Inc. v. Moreland, 9 Wash. App. 217, 511 P.2d 1402, 1404. Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another. L&A Drywall, Inc. v. Whitmore Const. Co., Inc., Utah, 608 P.2d 626, 630.

    Three elements must be established in order to support a claim based on unjust enrichment: A benefit conferred upon the defendant by the plaintiff; an appreciation or knowledge by the defendant of the benefit; and the acceptance or retention by the defendant of the benefit under such circumstance as to make it inequitable for the defendant to retain the benefit without the payment of its value. Everhart v. Miles, 47 Md. App. 131, 136, 422 A.2d 28."

    Given these legal definitions, if you still can’t see where Xbox Live subscribers who’ve had their consoles banned by MSFT and who can not and will not access their subscription thereafter and have been refused a pro rata refund of the balance of their subscription fees have at least a colorable claim for unjust enrichment, then you ain’t never gonna see it.

    And when facing a claim that you fucked thousands of subscribers out of their money and the outcome of that claim is judged against the backdrop of justice and equity and fair play, I’m not so sure that raising the fact that "technically" the subscription wasn’t canceled and that subscribers are therefore "technically" free to access their subscriptions is the best possible defensive strategy. To my ears, that doesn’t sound like you’re doing justice and equity and playing fair. That just sounds as if you’ve "technically" fucked all those people out of their money on a technicality.


  20. 0
    Torven says:

    At least I have made an attempt to support my position.  So far in this debate, you have claimed a right to refund for contracted services being properly delivered without providing any source, determined this to be unjust enrichment without any proof other than said unsourced claim and equated the act of disconnecting illegal hardware from a network to burglary.

  21. 0
    JDKJ says:

    Perhaps they are. If they are, then they already know that Article 2 of the UCC only applies to the sale of tangible goods. In fact, none of the Articles of the UCC address the sale of a service. Perhaps they also know, because the sale of a service is in dispute and not the sale of a good, that the UCC is of zero guidance in resolving the dispute.

    And I’m sure that at least one of Mircosoft’s outside counsels knows at least this much. I was formerly associated with that law firm. As I recall, the firm’s partners tend to be as sharp as attorneys come.   

  22. 0
    DarkSaber says:

    And you certainly don’t know what you are talking about out either. Modding a console is to cheating/hacking what downloading a torrent of a game is to cheating/hacking.


    I LIKE the fence. I get 2 groups to laugh at then.

  23. 0
    sharpshooterbabe says:

    I cant see why Microsoft did it, I don’t want to play w/cheaters or hackers & then get screwed. Hell even I don’t know how to modify a game or software.



    "It’s better to be hated for who you are, then be loved for who you are not." – Montgomery Gentry

  24. 0
    JDKJ says:

    I wouldn’t and haven’t taken the position that the banning of the modified consoles isn’t within MSFT’s rights to do so. That, I don’t think, is much at issue nor is it where a class action law firm smells a payday. The real issue is whether, having taken that decision, MSFT is required to refund the balance of the subscriber fees. And it is those refunds which plaintiff attorneys will see as presenting the possibility of a payday. And conjecture and speculation as to what a subscriber will or won’t do with their refund doesn’t, I believe, do much to negate the possibility that refunds are in order. If we take your conjecture and speculation to it’s logical extension, then it’s also possible that subscribers will take their refunds and buy guns and ammunition with which to blow the brains out of innocent bystanders on a street. Or donate it to their favorite terrorist organization waging war against America. Or use it to further the socially unacceptable crime of prostitution. Who knows? You don’t. Nor do I. Nor does a court. What someone may or may not do with their refund upon receipt cannot be predicted with any real degree of certainty and therefore plays no part in a well-reasoned judicial determination of whether they should, in justice and equity, get their value refunded to them.

    And as you have conceded by implication, it is entirely possible that a subscriber wasn’t themselves responsible for the modification but, rather, unsuspectingly purchased their console second-hand with the modification already existing. In those cases, it isn’t entirely clear to me that the equities require that those subscribers not be given a refund. Those circumstances put the lie to your contention that because the subscriber willfully modified their console in knowing breach of the TOS, it is equitable for MSFT to retain the balance of their subscription fee. In those cases, there’s no willful modification and there’s no knowledge of the modification. Does equity stomach MSFT retaining the fee of someone based on something they didn’t do and weren’t aware had been done?

    And are we even certain that merely because MSFT says a particular console has been modified and therefore subject to banning that this is indeed the case? What means are they using to determine if a console has been modified? Is it 100% infallible and, if not, what is the error rate of that means? Is it possible that the means returns a significant number of false positives? Is a subscriber given an opportunity to challenge the finding that their console was modified or is MSFT allowed to unilaterally make that determination unchallenged? If there are cases in which MSFT’s determination is erroneous, then I would think that not only is the denial of a refund inequitable, but the alleged fact of modification which you claim gives MSFT an equitable basis to refuse refunds is in reality a non-fact and, therefore, any punitive action taken by MSFT on that erroneous basis is itself inequitable. 

  25. 0
    narcogen says:

     "which in justice and equity belong to another"

    "nd the acceptance or retention by the defendant of the benefit under such circumstance as to make it inequitable for the defendant to retain the benefit without the payment of its value."

    If modifying the console is against the EULA, if you agreed to the EULA when you signed up, and if you know that cancellation of your membership for cause (violation of the EULA) means forfeiture of sums paid for said membership, then said cancellation is not "inequitable". 

    There’s a broad gap between "a practice which would be considered good customer service" and "a practice which is legally compulsory". Also, "inequitable" doesn’t mean "stuff I don’t like".

    Actually you could argue that the policy is socially progressive with regards to the XBL population. Any significant pro rata refund to members who have violated the EULA might well go right back into a new membership. A person who gets such a refund and unloads his banned console on Ebay to an unsuspecting buyer can be right back on the service, doing whatever it was he was doing, safe until the next sweep. One might, under such circumstances, accuse Microsoft of making only token efforts to keep pirates and cheaters off the service. Certainly developers and players might do so. The pro rata refund for EULA violators could be viewed as encouraging recidivism– specifically, recidivism that financially benefits Microsoft.

  26. 0
    thesillyoldbear says:

    Of course they’re within their rights, I don’t know why this was ever in question. Even here in Australia where it is legal to chip for the purpose of region-locking circumvention it’s unnecessary as we can play discs from all PAL regions.

    I’m not sure if, when they broke their regions up into larger chunks (PAL, NTSC and NTSC-J), it was Microsoft’s intention to allow parallel imports and thereby remove the possibility of innocent users who chipped for the purposes of region-locking circumvention getting banned in the process of weeding out pirates – but this is exactly what has happened.

    Congratulations Microsoft, for once you made a not-so-dick move.



  27. 0
    Zero Beat says:

    While I don’t like that it’s illegal to mod your console, they are within their rights to do this.  I support the banning of users who do nothing but spout insults and scream all day, even though I mute them.

    Also, the news is not about getting your facts straight anymore.  It’s a national "FIRST!" race.  One of the local news stations advertises how they’re usually the first people on the scene of breaking news.  It’s sickening.


    "That’s not ironic. That’s justice."

  28. 0
    hellfire7885 says:

    At least at times modders are trying to add fucntionality they’ve been wanting but the system doesn’t have. Instead of just, you know ,adding that feature if possible, they ban anyone who modded.

  29. 0
    SeanB says:

    I disagree. the people with modified systems do so knowing that they could be booted any time, most dont even complaing for more than a few minutes. If i owned an XBOX 360, it would be modded, but since i dont play online, i wouldn’t care much.

    Your comment about slimeball lawyers was dead on though. This wont go too far, because anyone signing up for the class action suit will be admiting they did something wrong.

    Also, when you get banned, your XB Live account is not touched in any way, so the line "may have resulted in new XBLIVE accounts" is wrong. Only a modded MACHINE is banned. Get a new machine, and your back online. You can even take your Hard Drive to a friends machine and download content, which when taken back to your modded machine, works just fine.

  30. 0
    Zerodash says:

    One would think that modders and pirates (thieves) would know enough to not use such consoles online.  I presume that these are pre-modded systems sold to people with little understanding of what they are buying other than "I can play free games on this thing!"

    This whole situation involves three shitty groups of people: a heartless corporation, people who think stealing is their right, and slimeball lawyers trying to make a dishonest buck.  The kicker here is that the corporation is in the right this time.

  31. 0
    JDKJ says:

    Interesting that MSFT goes on and on about their right to ban modified consoles but don’t ever address the issue which is the blood in the water for the sharks: refunds. 

  32. 0
    SeanB says:

    take a look at the modding websites, the hackers and programmers already know exactly how their software was caught. They usually do pretty quickly after each ban wave.

  33. 0
    Neeneko says:

    Regardless of how this case goes, I hope it makes it to some kind of discovery round.

    Microsoft spouts off all kinds of assertions regarding who they ban and their flawless methods for catching those evil pirates.. it would be intersting if some light was shed on their evidence or methods. 

    Though such revlations could expose them to real liablity if they can not show a low false positive rate and a robust process for handling them.  Regardless of what is in the TOC, it is never legal to take someone’s money and then not deliver a service because you _think_ they are in violation.

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