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Microsoft Joins Bandwagon to Block Class Action Lawsuits

As with previous Terms of Service updates, you also have the option to opt out.

The slightly delayed dashboard went live yesterday, bringing with it big legal changes.
The slightly delayed dashboard went live yesterday, bringing with it big legal changes.

When updating to Microsoft’s new Xbox 360 dashboard, you’re also agreeing to an updated Terms of Service.

Not surprisingly, Microsoft has joined Sony and Electronic Arts in asking consumers to waive away their rights to participate in class action lawsuits against them, preferring individual arbitration that's way cheaper for the company, doesn't involve a jury and avoids headlines.

The notable tweaks begin in section 18.1 of the updated Terms of Service, the most important change being this section:

“YOU UNDERSTAND AND ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION, YOU ARE GIVING UP THE RIGHT TO LITIGATE (OR PARTICIPATE IN AS A PARTY OR CLASS MEMBER) ALL DISPUTES IN COURT BEFORE A JUDGE OR JURY. INSTEAD, YOU UNDERSTAND AND AGREE THAT ALL DISPUTES WILL BE RESOLVED BEFORE A NEUTRAL ARBITRATOR.”

This language is similar to what both Sony rolled out after PlayStation Network suffered from a long outage, the result of a compromised network that exposed the personal information of tens of millions.

As with previous Terms of Service changes, however, you have the option to continue using the service, while also rejecting the changes made to your rights toward class action lawsuits.

“Notwithstanding anything to the contrary in this contract, Microsoft agrees that if it makes any change to Section 18.1 (other than a change to the notice address in Section 18.1.3) while you are authorized to use the Service, you may reject the change by sending us written notice within 30 days of the change by U.S. Mail to the address in Section 18.1.3. By rejecting the change, you agree that you will informally negotiate and arbitrate any Dispute between us in accordance with the most recent version of Section 18.1 before the change you rejected.”

That address, by the way, is Microsoft Corporation, ATTN: LCA ARBITRATION, One Microsoft Way, Redmond, WA 98052-6399, and you’re free to modify a template I created for the PSN incident that should work just fine in this situation, too.

Sony is the only company to publicly discuss the change, explaining it was only responding to a recent Supreme Court decision that allowed AT&T to prevent employees from engaging in class action lawsuits.

Patrick Klepek on Google+