Sony Bans Class-Action Lawsuits By PlayStation Users

Sony has amended its PlayStation Network terms of service agreement, to prevent users from filing class-action lawsuits against the company.

The agreement now includes a “binding individual arbitration and class action waiver provision,” which states that: “Any dispute resolution proceeding, 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.”

Furthermore, in the case of a dispute, Sony PlayStation account holders must seek arbitration with an arbitrator of the company’s choosing, rather than exercising their right to have a judge or jury hear their case. Legal claims can only be filed if the dispute isn’t resolved through arbitration in a timely manner.

Sony subscribers will be required to agree to the terms the next time they sign into their accounts. If they do not agree, they will not be able to use the online services. Those that want to opt out have to send a letter to Sony’s Los Angeles headquarters in the US, which will enable them to keep their right to file a class action lawsuit without any need for arbitration.

Sony PlayStation hack

The move comes after a string of hacking attacks between April and June compromised the personal data of more than 100 million PlayStation Network subscribers. The security breaches are expected to have already cost the company around $171.2 million (£106m) in losses.

Sony originally blamed Anonymous, claiming the breach had taken place while it was fending off a denial of service attack from the hacking group. However, Anonymous denied any involvement with the incident.

Despite this, hackers were found to be bragging on online forums that they had a database of 2.2 million credit cards in their possession, which they were threatening to sell for up to $100,000 (£60,000).

Sony has reportedly demanded that Switzerland-based Zurich Insurance “defend and potentially indemnify them from class-action lawsuits, miscellaneous claims and possible probes by state attorneys general over the hacking”. However, Zurich claims it is “not obligated to defend or indemnify any of the Sony defendants for the claims asserted”.

Legal papers filed by Zurich Insurance earlier this year revealed that 55 class action lawsuits are pending in the US because of the breaches.