17 September 2011


Earlier this year I noted the dispute between Sony and its insurers over compensation regarding large-scale unauthorised access to Sony's global entertainment network.

The BBC and The Register now note that Sony has amended its network's terms and conditions, with consumers being initially required to waive the right to collectively sue over future security breaches.

Users of the network will have to agree to the amended terms the next time they log on. They will however be able to then manually opt out of the agreement within the following 30 days, by sending a letter to Sony's Los Angeles headquarters. That opt out letter will be able the sender to retain the right to participate in a class action suit without any need for arbitration.

In the absence of the opt out users will now have to try to resolve any legal issues using an arbitrator picked by Sony, prior to participating in a class action.

The new amendment - characterised as 'Binding Individual Arbitration' - specifies that -
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.
Bounding participation in online services through a requirement that users first submit to private arbitration is not exceptional or necessarily offensive. It is for example a feature of most domain name registration regimes.

Sony has however been criticised for the way that it has introduced the changes, criticised as obscurely presented for an audience with 'click fatigue' (ie young consumers who do not understand legal small print and are accustomed to signalling their consent by mechanistically clicking 'agree'). Some presumably won't bother to send an letter from the UK, Australia or other locations outside the US.

Sony might more effectively - in terms of legal disquiet and its corporate profile - have adopted a more positive approach to consent and allowed consumers to opt out electronically, particularly opt out after viewing a plain english explanation of the consequences.