It is hardly surprising that many businesses, unwilling to defend their misdeeds in a court of law, have begun surreptitiously inserting arbitration clauses in consumer contracts following the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), in which the Supreme Court struck down a state law prohibiting such clauses. More surprising is the recent trend by gaming companies who are trying to change the terms of their bargain with their customers well after it has been consummated. In September, Sony altered the terms and conditions every PSN user “agrees” to when they install updates; those terms now include an arbitration clause with a class action waiver. As written, and assuming any court upholds it, this arbitration clause appears to preclude any future class action suits, even for claims that arise from actions or events that predate the new terms and conditions.
While Sony gives consumers 30 days to opt-out, it appears that there is no consideration for the new arbitration clause. To the contrary, Sony holds users’ ability to access the PSN hostage unless they agree to the new terms; only users that install new updates can access the PSN. On December 7, 2011, Microsoft followed suit, requiring users to agree to a new arbitration clause with a class action waiver if they wish to continue to access the Xbox Live network for which they have already paid.
It remains to be seen whether any court will enforce such an ex-post facto arbitration clause that is foisted on consumers with little or no meaningful choice and no commensurate consideration. If you or someone you know has an issue with a PS3 or Xbox that might be appropriate for class action treatment, please contact us to discuss your legal options.