To TOS Or Not To TOS: That Is the Question
by Johneboy1970, HSM guest contributor
Recently, all users of the PlayStation Network received a notice via E-mail about changes in the Terms of Service (TOS) and privacy policy. The privacy policy itself remained largely intact: the changes were more about a legal ‘rebranding’ of Sony’s online service from Sony Network Entertainment America Inc. (“SNEA”) to their new universal moniker, Sony Network Entertainment International LLC (“SNEI”). Not a huge change, and one which has little to no effect on the general user as it amounts to no more than legal housecleaning.
The Terms of Service were a completely different story.
While the vast majority of changes concerned the aforementioned shift in corporate identity, section 15 of the TOS is entirely new and could be quite worrisome (although not unexpected to those who follow legal and court news) to some users.
In a nutshell, when you click on the “I Agree” button on the new Terms of Service, Sony has included a clause which will prevent you from filing suit in a court of law (except for small claims court) for any legal disputes you may have with them. Instead, you will have your dispute handled in arbitration, which means that in lieu of going to court, you will voice your arguments to a professional legal arbitrator who will then decide on who wins the dispute. No case, no judge – at least, not in the sense we would normally think of one – no jury, and the arbitrators decision is legally binding and final.
Not only does this clause prevent you from filing suit (unless the claim is filed from small claims court), but it also keeps a case from turning into a class-action suit, which in lay-terms, is a number of law suits concerning the same complaint rolled up into one larger court case and tried at the same time.
Now, many of you are probably reading this and wondering if you can actually be forced to waive your ability to have your day in court in order to use Sony services. Can Sony – or any company for that matter – actually do that?
The answer is: yes.
It wasn’t too long ago that Verzion used a similar clause in its own TOS in order to force arbitration. The measure was fought out in the courts (as AT&T Mobility LLC v. Concepcion), with lower courts finding that Verizon was not within its legal rights to include a forced arbitration clause in its TOS. Earlier this year, the case made it on to the Supreme Court docket, where the general consensus speculated that the High Court would follow the previous rulings laid out by the lower courts.
The general consensus couldn’t have been more wrong.
In a 5-4 decision, the SCOTUS declared that a company was indeed legally entitled to add such a clause into their TOS. Justice Scalia, in his Majority opinion, stated, “…[the] prime objective of an agreement to arbitrate is to achieve ‘streamlined proceedings’ and expeditious results.”
Basically he’s saying, “why tie up the courts with a bunch of suits against a corporate entity when you can move things along much faster and neater in arbitration?”
At first blush, one might find Justice Scalia’s words to be a tad disconcerting, but looking a little deeper shows that he may just have a valid point.
When you file suit against a company, the costs to retain a lawyer for the duration of the case is somewhat high. Additionally, the case may be tied up in court for quite a while – sometimes years – going through all the processes and procedures, as well as any appeals which may have to be filed and argued. Add it all up, and there’s a good chances that unless your suit involves a great deal of money (or you take an offer of a cash settlement for a much smaller portion of what you may have been suing for), there’s a good possibility that you will spend a great deal more than what you have originally brought suit for – not to mention the amount of your personal time that you may spend in court or conferencing with your lawyer or legal team.
Also, when you are a part of a class action suit, the monetary settlement – while substantially larger – usually ends up a great deal smaller than what an individual may have been rewarded if you had brought suit yourself (lawyers and court costs tend to take a HUGE cut from any settlement).
The clause also makes sense for Sony. While the pay-outs for an individual plaintiff in a class-action suit may be small, this type of suit usually costs a company a great deal more money than smaller, individual suits. Also, this protects them from having to battle the huge amounts of frivolous lawsuits – which, even if thrown out of court, incur costs in fees to lawyers and the court – and are commonly brought against any large company every year.
The drawback is, of course, that by signing on to the TOS, you’ll be signing away your right to a trial (the exception being a small claims court filing) to recover damages from Sony in the case of a legal dispute. And arbitration, while generally fair, also tends to sometimes dole out smaller amounts in damages than a full trial. In essence, no more than a legally organized settlement.
So, where does this leave you, the average Sony customer? The reality is, not all too far from where you started before the changes to the TOS.
Realistically speaking, how many of us have had cause to bring suit against Sony for damages which are in excess of a small claims court filing – which have a ceiling of between $3,000-25,000 for claims in the US, depending on the jurisdiction (California, which is mentioned in the TOS as the default state for legal action, has a limit of $7,500)? The most likely damages a user might sue for would generally revolve around damage to equipment, defective equipment, or problems with virtual items – all easily within the realm of small claims, which is exempted from section 15 of the TOS.
For cases which may have larger monetary numbers in the terms of the suit, arbitration is usually a fair method for the ultimate disposition of a case. Much like in a regular court case, arbitration allows for arguments from both sides and evidence to be entered into record; the big difference is, of course that it’s the arbitrator who makes the final decision, and not a jury. Also, let’s not forget that this would still leave Sony open to criminal prosecution in a court of law in the instance where they may actually do something illegal.
The problem is if Sony does something very wrong to its users in which an individual or class-action suit would be warranted, the clause would prevent such a suit from occurring. While certainly not impossible, it’s highly doubtful that such an incident would arise.
One can argue that it would be near impossible to sue Sony on its business practices (unless they do something illegal, in which case the Attorney General’s office would bring the suit and not a citizen) due to the clause. This seems to bear weight, but in all of the TOS’s I’ve read to date as a user of Sony services and equipment – as well as several other companies which have a user end TOS – there has always been a stipulation that Sony reserves the right to change its services(s) at any time, in any way it sees fit. This includes things like imposing a fee – or even eliminating without warning, for any reason – on previously free services like Home, a monthly fee for purchased items such as the Clubhouses, or the decision to get rid of the other OS. This pre-existing clause was a dampener on such cases well before the new version of the TOS.
Also, most importantly, the TOS also states that you may OPT-OUT of the arbitration clause. The document contains an address to which you must send your intent to opt-out – in writing – within thirty days of your acceptance of the newly overhauled TOS.
The big unknown is what the ramifications of opting-out may be. Would you still be allowed service as normal if you choose that path, or will your service be cut off as if you didn’t click ‘I Agree’? I have sent an e-mail earmarked for Sony’s legal department asking just that question. I have not received a reply as of yet, but I will update this story – or write an additional one – when and if I do.
In the end, for the vast majority of users, this change of the TOS, while seemingly dramatic, will most likely have no impact on our use and enjoyment of Sony services. The implications of the Supreme Court’s ruling are more of a philosophical debate at this point, as the High Court has already ruled in favor of the legality of such TOS clauses. Sony is doing what they are well within their legal rights to do.
Now it is up to the individual to decide if they want to adhere to the TOS – sign on the dotted line or not. It’s up to you.
September 16th, 2011 by johneboy1970 | 44 comments
Johneboy1970 is a guest contributor to HomeStation Magazine.
Read the changes and clicked accept! I understand the need to protect against a world of crazy basement dwellers.
Didn’t read a single thing and clicked Accept. Why? Cause I actually want to play online and I have no interest in hacking my system and challenging Sony in court.
I read the TOS and accepted as well. The only thing I can see ever being an issue with Sony is items being missing and that certainly won’t send me scampering to court over a couple of dollars, it wouldn’t be worth the effort or time. I am not surprised at all that they have taken this step after the 24 day hacking fiasco. I am sure several people have tried to take advantage of that situation and sued them over something. In this sue happy society we live in, it makes perfect sense.
Does it apply to EU users? I received no mail from Sony.
Don’t know but here we had to re-accept the TOS yesterday before logging in. There was no messages or emails that I know of, just the fact you couldn’t log in until you accepted it.
I got an email on the changes at the address I registered for my PSN ID, a few days before the new TOS was imposed.
That said, I don’t think I’ve ever read a complete TOS from any entity. I could be signing away my rights for free oxygen for all I know, or agreeing to tattoo the Sony logo on my forehead. Lawyer-speak turns my mind to overcooked oatmeal.
Oh good, glad to know I’m not the only one that happens to. With the quantity of legal documents I’ve had to read in the past year, I’m surprised that my fish doesn’t have more functioning brain cells than I do!
C’mon folks, leagaleese is fun…it makes your head spin without the need for booze.
After a fashion, you need the booze to make it un-spin.
Thank you for writing this article, by the way.
Ha! Booze -- The cure-all for linguistic conundrums!
You’re quite welcome…hopefully it prooves helpful to HSM’s readership.
So can I bribe you to explain legal documents to me, Johne? Boil down to one-paragraph summary, with recommendation at the end: Sign or Don’t sign. What’s it worth to you?
but booze is fun….
Who says he doesn’t…jk..wub you..
Having actually been part of a class action lawsuit once I can tell you they don’t pay out very much usually,at least to each individual.I received the astronomical amount of $10 from Dodge for a problem with my Jeep that I had never even noticed so now I always buy Dodge products as they are the only car maker that has actually given me cash,lol.I clicked accept after reading the latest TOS as well because it is really the only option a gamer addict has if they want to continue using Home.As for the SCOTUS well it’s pretty common knowledge that the majority of them are pro-business and anti-individual rights oriented so their ruling on TOS’s isn’t surprising to me.Originally the whole idea of lawsuits was to act as a warning to ppl not to engage in similiar behavior as at that time the whole idea of Government oversight of everything was considered evil.Nowadays lawsuits don’t really serve the same purpose as most intentional offenders can either get away with it or get judgements lowered while companies that just make an honest mistake get hammered.I’ve also been a party to an arbitration hearing and what happened was the arbitor received as much info. as both sides could provide and then made a decision,in my favor.Of the 2 different ways of doing things I got a lot more cash from an arbitration than a class action lawsuit which is why I’ve always been a little surprised that companies seek arbitration.If you are truely guilty of something it would be much,much easier to get away with it in a court room than in arbitration.
Indeed, class action suits, for all thier hype and hoopla, generate vastly more revenue for the lawyers and the courts than for the people who were harmed.
By the way, you can’t be found guilty of anything in an arbitration, which is why criminal cases are always tried and not arbitrated. You can be ordered to pay damages or recompence, but you can only be found guilty -- or not guilty -- in a court of law.
By “guilty of something” I meant that they actually did what they were accused of and would have to pay damages not it’s legal definition or to imply that any finding by an arbitor would have criminal implications.Sorry if I confused anyone but I had thought that it was common knowledge that arbitration has no standing in a criminal proceeding.I should have said”If someone has truely committed damages against another it would be much,much easier to get away with it in a courtroom than in arbitration.”
Didn’t anyone watch the South Park episode where they parodied the “click and accept” way people behave today.Yesterday I had to go through the TOS and as usual I read it even though I was going to accept it regardless.But as to detect a new paragraph in it is something I wouldn’t pick up on.That”s quite impressive.Thank you for letting us know.
Thanks, but don’t be too impressed, Susan. As I always read everything I sign, I’m sure I would have caught it…but the e-mail I recieved from Sony explicitly pointed out that there was important stuffs to read in section 15. Now if you STILL want to be impressed, I certanly won’t hold you back…
I can honestly say I delete alot of the emails I get from Sony without reading them.I shall not commit such offense again…
Bah… I’ll agree to pretty much anything they ask me to. Why? Because if not my PS3 becomes paperweight. Besides, no matter the TOS if you REALLY wanna sue Sony you can. A good lawyer can pretty much get around anything. heh.
Yeah true and in some states you have more rights than in others when it comes to these things so you really need to know which states laws apply here and what they are if you truely feel wronged by anyone.
A good lawyer can indeed work wonders, but it’s extremely hard to get around a SCOTUS decision…except with another SCOTUS decision
Or if your the U.S. Government which ignores some of it’s rulings like Andrew Jackson sending the Indians to Oklahoma or the 1 that basically said that the Income tax was illegal.
Agreed, Cthulu. The history of the US is pockmarked by Presidents (or Legislatures) doing things which are blatantly Unconstitutional or circumventing SCOTUS decisions. One needs not to go as far back as Jackson (in many ways, a vile man) to find such instances…even the briefest of glances at our current and former administrations will clearly show that SCOTUS rulings and the Constitution are often an afterthought when a despotic mindset finds its way into the oval office.
I’m curious though: what was the name of the SCOTUS case which said that income tax was illegal? Not that I would disagree with that notion, as the 16th amendment was not properly ratified by the States. I know of some State High Courts which ruled that imposing a wage tax was unconstitutional, and I know of some cases which were brought to the Court which they refused to hear, but I don’t know which SCOTUS decision you’re talking about. If you happen to recall the case, please let me know.
Well johneboy it’s a complicated wording but in Stanton v.s. Baltic mining company the court said that the new powers given the government by the 16th amendment were an indirect tax.Indirect taxes are far different than what we have now which is why the government calls the with-holding of income taxes “Voluntary Compliance”.The whole income tax debate involves some pretty complex wording that can be rather confusing for ppl.I was just reviewing the 5 or 6 pages of the Stanton decision a few min. ago and the legalese made my head spin.There were 5 or 6 cases tried around the same time as Stantom(1916-ish) that all basically agreed on this point,the income tax was never intended to be applied to individual citizens.As for the Government being a “fam” well I guess it was for awhile as the Bush and Clintons were in charge of it for quite awhile but if your comparing the Govt’ to a Home “fam” I’d say you were probably way off base as most Home “fam”‘s would never participate in some of the shady things our Government has.
*Stanton
The U.S.government is just on big “fam” didn’t you know…
In my opinion only,most people who are on the left subscribe to that notion johneboy. Here is a perfect example.FreedomtoFacisim.com .These people have a tendency to believe in conspiracies and such.They also attempt to justify their arguments with twisted truths,same people who probably say we didn’t land on the moon or that in a few months China is going to EMP us and invade the US with N.Korea and Russsia…
Not all conspiracies are twisted truths.It’s pretty well known that some conspiracies were hidden truths.With a little research it should be quite easy to differentiate the quack theories(fake lunar landings) from truths(the fact that Britian knew 6 months in advance that pearl harbor was going to be attacked).It just takes a little time but it can be quite fun to delve further into these things,there is nothing quite like the fun of watching a “New World Order” believer rant for an hour,vivid imaginations I’ll grant them that,lol.
And as far as political leanings go most anti-income tax ppl I know of are on the far right.You know,the anti-big Government types that feel the tax is an intrusion into their constitutional right to enter into contracts.My own views are not so cut and dried as far as right or left go,they are a mix of each but certainly not in the center,usuallly.Most left leaning ppl I know of think the tax is necessary for the Government to function,they just don’t like the amount they pay.
@Susan: Which notion do you mean, Susan? IF you’re referring to the Income tax being Unconstitutional or outright illegal, then I’ve found that people who lean to the right (as Cthulu pointed out)politically tend to support that idea (If your curious,I tend to be more of a centrist and decide on political issues on a case by case basis).
I am very aware of Aaron Russo’s work, and truth be told, there’s a lot of merit in what he outlines in his films. As it has been some time since I viewed his work specific details may be sketchy in my memory, but I do recall that his research was quite sound.
Additionally, the 16th amendment was indeed never ratified properly – a simple fact if one checks the Congressional record of its passage (I have yet to read the case Cthulu kindly brought to my attention, but will be digging in soon).
And I have to agree with Cthulu: one cannot paint ‘conspiracy theories’ (I truly dislike that term, but use it for lack of a better one) with such a broad brush. Cthulu’s examples are right on the money and can be expanded into a much larger list of things both true and ludicrous. For myself, I’ve found that a great many things which people consider ‘conspiracy theories’ have a lot more truth to them than most would know about or even admit.
Therein lies the interesting part: digging into a subject to see what is actual fact and what is hyperbole and outright lies. You’d be surprised how many things once brushes off as a flight of fancy can actually be tracked down and attributed to its original (and oftentimes legitimate) source.
Oh, and thanks for passing the case name on to me, Cthulu. I do appriciate it -- it sould be an interesting read and would go nice with a merlot
Have fun johneboy,as you like legalese so much I’d also advise reading the other cases as well,sorry I’ve forgotten the exact names but they were all around the same time period and deal with different aspects of the tax.I agree with you about conspiracy theories,must start out with at least a grain of truth and to truely seperate fact from fiction it’s best to do your own research on any topic that interests you as many researchers commit the academic sin of adding their own slant to the facts.I’m not saying conspiracy theories are correct,in almost every case I can think of there are at least a few errors of fact,but it can be fun if you have a knack for history to look deeper into these things.I forget the exact quote but Oppenheimer got it right when he said the true scientist must be free to inquire into anything there is no place in science for dogma.
*most (could really use that edit feature,lol.)
If you really, truly want an edit feature, I urge you all to do the following:
1. USE A PROPER WEB BROWSER. Not IE, and most certainly *not* the one on the PS3.
2. TELL EVERYONE YOU KNOW TO USE A PROPER WEB BROWSER. Especially not to use the one on the PS3.
3. CONTINUOUSLY URGE SONY TO PROVIDE A BETTER BROWSER ON THE PS3. Because quite frankly, the one they got now drives me mildly homicidal.
(Because trust me on this, you aren’t the only ones. There’s some capabilities on the backside of the site -- namely in the forum -- that would be really nice to have if we didn’t have to allow for the good number of people who read HSM from their PS3s.)
When I am on this site I am always in google
Your right johneboy. I was using the term “left” as a general term.Something I’m learning on here Iguess..lol..My opinion is that people can take any piece of news or whatnot and make it fit into their theory.I am a face value person.I have many friends who adopt a conspiracy mindset and that’s fine.It when they try to impose their beliefs upon you and make you feel small for not agreeing with them.that being said, I apologies for my incorrect assessment of what political wing is taking issue with what.
That’s quite all right, Susan…no apology ever needed in conversation.
And I do agree with you that any piece of news can be slanted to fit a particular paradigm – especially in the realm of politics. Case in point watch the same political news story on FOX, then on MSNBC; it’s obvious that both ‘news’ outlets will pepper the story, or its presentation, to make their political viewpoint on the matter seem right.
Just reading the comments section of a story about a dog who leapt off of the back of a boat and caught a 22 pound flounder, and you’re sure to find that the conversation quickly devolves into a Red vs Blue battle royal…when, of course the original story had nothing to do with that.
Also, in speaking with people who have very strong opinions about ‘conspiracy theories’ I have also noticed that many will scoff if you don’t believe them – much in the way that they are scoffed at when they speak about what they believe in.
Unfortunately, when passions become inflamed rational conversation goes out the door, down the block, finds a nice pizza place, and has a slice and a coke until it’s over.
I love FOX..I watch O’Reily all the time..Love his take on things. Red eye..Awesomsauce.I actually watch Keith Oberman to and Rachell Maddow.Do I agree with everything? No. Do I find it informative? Yes.But your not playing fair..you said …PIZZA………………………………………………..
Yep…that’s right…I said the “P” word. Want a slice?
Only if it is from Godfathers Pizza…
Oh, you meant “P” as is in “Political Pizza?”..that I am full on needless to say.!
No no no, Susan, I never EVER confuse politics with food. When I said Pizza, I MEANT pizza. And you can choose the topping…just no pineapple, please.
Heres 2 more that might interest you johneboy.Brushaber v Union Pacific(1915or16) and Peck v Lowe(1918).These are 2 of the other 5 or 6 I reffered to and Stanton is right after Brushaber and references Brushaber so these all compliment 1 another.Draw your own conclusions but I think you will see what I’m talking about.