Sony Adds Mandatory Arbitration Clause to PSN ToS

If you are a member of Sony's PlayStation Network, chances are you were greeted with an email from the company this morning telling you that that the terms of service for the network are about to change. The big change, in case you haven't received that email yet, relates to your ability to sue them. From section 15 comes this wonderful new clause:

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

In laymen's terms, it means that if you feel the need to sue Sony or any of its associated companies that work in concert with PSN, you'll have to go through what's commonly referred to as "mandatory arbitration." You agree to mandatory arbitration on an individual basis when you log onto the network, the new ToS asserts.

Basically you agree to go before a third party if you have a dispute with Sony. Generally these third parties are hired from companies that specialize in corporate arbitration and - most of the time - side with the company that used their services because they want the repeat business. Also, these third parties are not bound to follow the law.

Lovely. You can read the new terms of service here (PDF). The good news for consumers, if there is any at all, is that if you sued prior to August 20, 2011 this change in the ToS has no affect on that action.

As an aside, if you haven't watched the documentary, Hot Coffee, you should because it explains how corporations like Sony have turned "frivolous lawsuits" into a buzzword to mean greedy consumers who want to sue for the dumbest of things.. like getting burned by a cup of hot coffee from McDonald's. We have all heard that story before but when you see the elderly women who filed the lawsuit and how badly it burned her, it shows you that corporations have fooled society into thinking anyone that sues is just out to make a quick buck off of minor complaints. You can watch the trailer to your left.