Sony's contract forbids class-actions

It seems that Sony has had a gutsful of being taken to court in class actions and has re-worded its conditions of use to stop users from doing it.

According to the Examiner, Sony is updating its user agreement for the PlayStation Network. Not only has it changed the name of its  legal entity from Sony Network Entertainment America (SNEA) to Sony Network Entertainment International, it is insisting that arbitration is the only means for any user to solve disputes.

The agreement is a little strange because it offers users the ability to opt out of it, if they dash off an urgent letter to Sony saying that you do not wish to be bound by it.

To do that, you would have had to have read the small print in the conditions of use, and notified Sony in writing, which must be sent by snail mail to its LA headquarters. All this has to be done within 30 days.

The EULA update appeared on the Playstation Network yesterday. Our guess is that people clicked it without reading it and therefore Sony hopes to get away with it.

Forced arbitration is increasingly being seen by big tech companies as a great way of avoiding messy class-action lawsuits. Arbitration is carried out behind closed doors and negotiations are often carried out in secret.

In the recent Sony hacking case, Sony would have had to have dealt with thousands of arbitrations. The point is that most people can’t be bothered going through with them. Chances are it would not have had to pay out much as the arbitration would probably come up with the actual value of the loss. Class-actions, however, are expensive, take a lot of time and often result in a company paying a lot of cash to users.