Sony's Asking You to Waive Your Rights, But You Have Options

Agreeing toPSN's new Terms of Service waives certain legal rights, unless you mail a letter.

UPDATE: Some users pointed out this wouldn't apply worldwide, as laws are in place elsewhere to protect consumers from this. Kotaku Australia confirmed it won't apply to Europe or Australia.

ORIGINAL STORY: When I booted up NFL Sunday Ticket to watch the Chicago Bears on Sunday (which worked fine this week), Sony asked me to agree to an updated Terms of Service to access PlayStation Network. Standard stuff. We blindly agree to these things all the time, but this time, it's different.

Sony is asking you to waive the right to collectively sue them, and instead resolve any disputes individually through another process called arbitration (read: outside of the courts).

Sony has not revealed why it's implemented this change, but it's easy to guess it's in response to PSN security imploding back in April, exposing the personal data of 75 million PSN accounts. It was a total disaster.

Within days after admitting PSN had been compromised, the company had been sued, that time by 36-year-old Kristopher Johns of Birmingham, Ala, in the U.S. District Court for the Northern District of California.

Below is the legal excerpt causing a stir, but you can read the entire updated Terms of Service right here.

"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 legal action, unless both you and the Sony entity with which you have a dispute specifically agree to do so in writing following initiation of the arbitration. This provision does not preclude your participation as a member in a class action filed on or before August 20, 2011."

If you don't agree, you cannot continue to play games online. That's a hard bargain.

The reason people bring class action lawsuits against companies runs under the the same principles governing unions: power in numbers. One person's going to have a tough time staring down a giant corporation, but if thousands or millions of people are speaking together, there's a chance it'll listen. Having the discussion happen behind-closed-doors doesn't help matters.

This effectively cuts group action off at the knees.

Sony's likely buried the opt-out option in this update to discourage anyone from opting-out.

"This really sort of sucks because it is doubtful that any individual could afford to sue them," explained Washington attorney Thomas Buscaglia, who specializes in games. "Not sure how enforceable it will be, but I think it it would be really cool if gamers started to circulate a form opt out rejection of these terms and mailed them in."

As it turns out, there's an opt-out buried in the Terms of Service, but if you've already signed off on the updated Terms of Service, you need to act quickly; Sony's built a countdown into the agreement itself.

"If you do not wish to be bound by the binding arbitration and class action waiver in this Section 15," reads the Terms of Service, "you must notify SNEI [Sony Network Entertainment] in writing within 30 days of the date that you accept this agreement."

Tick, tock. Tick, tock.

To retain your right to participate in class action lawsuits, you must send the company a letter with your name, address, PSN account and a "clear statement that you do not wish to resolve disputes with any Sony entity through arbitration." Once you have that letter prepared, print it out and mail it here:

6080 Center Drive
10th Floor
Los Angeles, CA 90045
Attn: Legal Department/Arbitration
Attn: Sony Legal Department: Dispute Resolution

I'll even make things easier: here's a document I created you can use as your personal template.

What happens next isn't clear.

Sony has provided all 75 million and counting members of PSN a clear way to maintain their existing rights, but by asking everyone to agree to ditching those rights in order to continue using PSN and asking them to mail a letter to keep them, they've ensured most will have given them away. That's assuming the majority of users are even aware something substantive has changed; how often have you seen an email full of legal mumbo jumbo, pretended to read it, then quickly deleted it?

That said, Sony's move could run into problems, regardless of whether you send in a letter or not.

"This is certainly not standard practice by any standards...in fact it may well not be enforceable," said Buscaglia. "Time will tell on that one. The US Federal Trade Commission and various state consumer protection agencies could have a problem with it. Also, some courts might not allow it to be enforced due to existing state court precedent."

Even if this move wouldn't hold up in court (ironic!), it may scare off anyone from trying, which would make it a success.

As Buscaglia said, time will tell. In the meantime, maybe you should go buy some stamps.