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Sony subverts consumer rights

Published: October 14, 2011
Section: Opinions


Back in April the Playstation Network went offline for more than a month due to the actions of hackers—allegedly the group Lulzsec. Class action lawsuits ensued when Sony admitted weeks later that vast amounts of personal data had been stolen. Back in 2010, similar lawsuits were drawn up when Sony removed a feature that allowed users to install Linux on their Playstation 3s. It was removed through a software update from consoles that had been sold and advertised with that functionality. In 2009, class action suits were filed after a system update rendered some systems inoperable.

In April the Supreme Court upheld the legality of AT&T putting clauses in employment contracts barring employees from filing class action suits.

It seems that Sony—taking a move from AT&T—decided to take away consumers’ rights to file class action lawsuits. While both cases seem ridiculous by barring people from exercising a right, AT&T’s situation makes more sense because it only affects people who choose to work and collect a paycheck or salary from AT&T. Back when I spent a summer working in the video games department of my local Toys “R” Us store, I was informed that, while I worked there, I was not to list Toys “R” Us as my employer on Facebook; if I had a problem with it, I could have found a job somewhere else.

Last month Sony updated its terms of service, a contract that any user must agree to in order to use any online functions, such as watching Netflix, playing games, or even downloading software updates and patches. Furthermore, new games come with updates on the disc. If a customer doesn’t agree to the new terms and install updates, the customer is unable to play new games. It takes around five seconds to skim to the bottom of the terms and click “accept” when you want to download an update or watch a movie. It takes significantly longer to read the terms fully and, if you oppose, go through the process of opting out.

What makes this situation fundamentally different from the AT&T scenario is that consumers pay anywhere from $250 to $350 (up to $600 if they bought an older edition) just to own the console. Netflix, if you have a membership, and online game-play are available at no additional cost. Through advertisements of these features the PS3 was sold to consumers with these features as part of the value at $250, making the system worth less than its retail price without these features.

Additionally, unlike with AT&T, where the employee has to sign the contract once, Sony requires users to continue signing the contract whenever they amend it in order to maintain the full use of their PS3. This puts users in a major bind because either they accept terms that limit their rights and remove functions from their systems or they lose out on some of the other major selling points of the system based on Internet connectivity.

By forcing consumers to give up their right to file lawsuits with class-action status, Sony also forces consumers to give Sony the advantage in individual legal disputes. Instead of class-action lawsuits, in which Sony could be, theoretically, ordered to pay million-dollar settlements to thousands of people, Sony gets to address each grievance on an individual basis. Sony’s displayed preference for arbitration out of courts is further to the detriment of consumers.

Arbitration, an out-of-court settlement procedure, is a process where both sides split the cost of an arbiter, to the tune of a few hundred dollars per hour, unlike court costs, which are often paid by the losing side.

This process is clearly unappealing to the average consumer, who would have an easier time just buying an Xbox 360 or Wii for less than the cost of an arbiter.

Sony’s online service may be free to use but that doesn’t give Sony the right to take away advertised features or repeatedly ask customers to give up more and more rights in order to use the service. I could even accept this new contract for new customers, who would buy the system after the change was implemented, but for customers who bought PS3s before September, it is wrong for Sony to demand that customers either give up features or stop playing new games.

Sony would do well to implement a grandfather clause, where the customer is held to the contract that was in place at the start of their use of the service.