Analysis: Sony's Updated Terms Of Service: Mountain Out Of A Molehill?

Sometimes you have to wonder if Sony even bothers to
run things by its public relations department before taking action.

Just as the company was starting to put the consumer badwill of this
year's hacking fiasco behind it, it goes and slips a change into the
terms of service for the PlayStation Network – and the masses began to
howl once more.

In a nutshell, in case you missed the outrage yesterday, a new section in the PSN user agreement
says that by digitally signing off on the agreement, you consent to
refrain from joining a class action lawsuit against Sony – unless Sony
says you can.

It's another chapter in the "How not to do crisis PR" course that is
bound to emerge from Sony's fumbling of so many things this year, but is
it legal? It certainly seems so.

"Yes I think it's bad PR by Sony, and they could have handled it
differently, but they're certainly within their legal rights," said
Michael Pachter, an analyst with Wedbush Securities and a licensed
attorney.

Earlier this year, the Supreme Court ruled on a very similar issue in the case of AT&T Mobility LLC v. Concepcion.
Justices found that AT&T (or any company) could force customers
into arbitration rather than class action suits – a decision that court
observers said could hurt consumers' ability to challenge companies in
court.

While the move was certainly handled poorly by Sony, this really seems
to be more a case of the collective gaming public getting riled up over
something that has little, if any, consequence for them.

While you're unable to join a class action suit, there's nothing in the
terms of service preventing individuals from suing Sony on an individual
basis.

Additionally, since the PSN is a free service, Sony has a little
(perhaps miniscule) more ethical leeway in adding this sort of a
condition. Had Microsoft inserted a similar agreement, yet still had the
gall to charge $60 on top of that, the people gathering torches and
pitchforks might find themselves standing on the moral high ground.

Class action suits are the sort of thing that sound great in theory. A
collection of wronged people banding together to demand some form of
retribution. And occasionally, just occasionally, those people get what
they deserve – serious remuneration for a serious wrong.

In the entertainment world, though. Things generally don't work out so well. Let's look back:

· The Hot Coffee class action suit against Take-Two Interactive Software? Members of the class ultimately got $5.
· Take-Two shareholders who sued over the company's failure to consider a takeover offer from EA? They got nothing.
· The class action suit against The9 for allegedly misrepresenting facts? Dismissed.
· That class led by the former Rutgers QB who alleged his publicity rights were infringed by NCAA Football? Also kicked.

In fact, the only class action suit that has had any real impact on the
industry in recent years was the one that was spurred by the EA Spouse
blog. And consumers weren't the winners there. Developers were.

There are plenty of class suits floating in the wind these days. Sony
has a couple already looming due to the security breach. Microsoft is
facing one for "unauthorized charges" on Xbox Live Gold accounts.
Someone's even trying to convince a judge that EA has gouged the public
on the price of the Madden football games. (That's my personal
choice for the most ludicrous piece of circular logic making the rounds
today, by the way. If you believed Take-Two would keep its 2K football
line at $20 indefinitely, you're sorely in need of an economics primer.)

Losing those cases would be a pain for publishers, but the only people
to get rich off of them would be the lawyers. Consumers would get a
little pocket change (at best) and have to jump through a few hoops to
get it.

One other note: Some of the people crying loudest about Sony's action on
message boards (though, to be fair, this isn't the case among
Gamasutra's commenters) are the 13-16 year olds who clog multiplayer
games with their obscenity-laced trolling. What most probably don't
realize is their thoughts on this, at present at least, are entirely
irrelevant. You can't have standing in a class action suit unless you're
18.

So: PR misstep? You bet! Legal issue? Not so much. A movement full of sound and fury, signifying nothing? Absolutely.