This morning when I tried to download the demo for GoldenEye 007: Reloaded via the Xbox website, I was greeted with an updated terms of service page and for once in my life I decided to skim the thing (after all, I’m not in a hurry to play a GoldenEye remake).

I found an interesting section (Section 18.1.6 to be precise) labeled with the heading “CLASS ACTION WAIVER.” My first thought was, “Has that always been there?” and after some digging I found that no, this is new.

For those that don’t know, adding a class action clause is not unprecedented. This year both Sony and Electronic Arts have added such clauses to their Terms of Use agreements, and now Microsoft has followed suit. To put it bluntly, with acceptance of the new agreement, you lose the right to create or join a class action lawsuit, no matter how much the company in question screws up.

For those that want to know the exact wording, but don’t want to read the whole document, here are the important bits:

18.1.4. BINDING ARBITRATION. IF YOU LIVE IN THE UNITED STATES, YOU AND MICROSOFT AGREE THAT IF YOU AND MICROSOFT DO NOT RESOLVE ANY DISPUTE BY INFORMAL NEGOTIATION UNDER SECTION 18.1.2 ABOVE, ANY EFFORT TO RESOLVE THE DISPUTE WILL BE CONDUCTED EXCLUSIVELY BY BINDING ARBITRATION IN ACCORDANCE WITH THE ARBITRATION PROCEDURES IN SECTION 18.1.7 BELOW. 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, WHOSE AWARD (DECISION) WILL BE BINDING AND FINAL, EXCEPT FOR A LIMITED RIGHT OF APPEAL UNDER THE FEDERAL ARBITRATION ACT. ANY COURT WITH JURISDICTION OVER THE PARTIES MAY ENFORCE THE ARBITRATOR’S AWARD.

THE ONLY DISPUTES NOT COVERED BY THE AGREEMENT IN SECTION 18.1 TO NEGOTIATE INFORMALLY AND ARBITRATE ARE DISPUTES ENFORCING, PROTECTING, OR CONCERNING THE VALIDITY OF ANY OF YOUR OR MICROSOFT’S (OR ANY OF YOUR OR MICROSOFT’S LICENSORS’) INTELLECTUAL PROPERTY RIGHTS.

This is soon followed with:

18.1.6. CLASS ACTION WAIVER. YOU AND MICROSOFT AGREE THAT ANY PROCEED­INGS TO RESOLVE OR LITIGATE ANY DISPUTE, WHETHER IN ARBITRATION, IN COURT, OR OTHERWISE, WILL BE CONDUCTED SOLELY ON AN INDIVIDUAL BASIS, AND THAT NEITHER YOU NOR MICROSOFT WILL SEEK TO HAVE ANY DISPUTE HEARD AS A CLASS ACTION, A REPRESENTATIVE ACTION, A COLLECTIVE ACTION, A PRIVATE ATTORNEY-GENERAL ACTION, OR IN ANY PROCEEDING IN WHICH YOU OR MICROSOFT ACTS OR PROPOSES TO ACT IN A REPRESENTATIVE CAPACITY. YOU AND MICROSOFT FURTHER AGREE THAT NO ARBITRATION OR PROCEEDING WILL BE JOINED, CONSOLIDATED, OR COMBINED WITH ANOTHER ARBITRATION OR PROCEEDING WITHOUT THE PRIOR WRITTEN CONSENT OF YOU, MICROSOFT, AND ALL PARTIES TO ANY SUCH ARBITRATION OR PROECCEDING.

For those wondering what “arbitration” is, it is a proceeding in which a dispute is resolved by an impartial adjudicator whose decision the parties to the dispute have agreed, or legislation has decreed, will be final and binding. This tends to end in favor of large businesses, and even if the consumer wins, the payout is relatively small. The decision is final with (usually) no way to contest or appeal said decision.

The only way out of this is to contact Microsoft directly, by mail, within 30 days of agreeing to the Terms of Use in accordance with Section 18.1.11. And even then “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 taking any other action.

Here is a Notice of Dispute form to give you an idea of what information you will have to send Microsoft, and below is the mailing address.

Microsoft Corporation, ATTN: LCA ARBITRATION, One Microsoft Way, Redmond, WA 98052-6399

Previously, shortly after Sony and EA did this, the website gamersoptout.com provided a service in which they would print a form letter that was customized with your info and mail it for you. However, they are in the process of migrating their site and it is unknown if they will add Microsoft to their letter writing campaign as well.

And finally, here is the full Xbox Live Terms of Use if you wish to review the whole thing.

EDIT: GamersOptOut is back online with the heading, “Currently working on adding 360 Opt-Out option!” However, I wouldn’t recommend waiting for their option as most people have already accepted the terms of use, and only have 30 days to send in a rejection of the revisions to Section 18.1.

What I’m doing is printing out the Notice of Dispute form, filling out the info, and under the first question of the second page I wrote, “I hereby reject the changes made to Section 18.1 of the Xbox Live (and Zune) Terms of Service.”

Categories: 360, News, Xbox 360 News

7 Responses so far.

  1. Anex says:

    I also noticed that “by accepting the terms you agree you are 18 years of age or a major..”. Too bad Im sure that went unnoticed or uncared for.

    Anex   [ 16:34, December 7th, 2011 ]

    There’s the exact wording:

    “By creating an account or otherwise accepting this contract, you represent that you are at least 18 years old or have reached the age of “majority” where you live. Your parent or legal guardian must set up an account on your behalf and accept this contract if you are under 18 or have not reached the age of “majority”.”

    If only.. if only..

    Joe Pomerening   [ 18:29, December 7th, 2011 ]

    @Anex, Basically, being a minor and installing the new Dashboard is a Get-out-of-contract-free card. You cannot enter into a contract with a minor. When you do, the contract is void.

    At the same time, though, a minor can’t enter into a class-action lawsuit (to the best of my knowledge, at least), so you still can’t sue Microsoft.

    Burukan   [ 22:25, December 7th, 2011 ]

    @Joe Pomerening, That isn’t exactly accurate. You can enter into a contract with a minor. The contract isn’t void but is voidable, at the behest of the minor. (The minor must reject the terms of the contract before reaching the age of majority else he/she will have ratified said contract and will be bound by its terms.) However, there are contracts which minors cannot get out of – contracts for necessaries (food, shelter, etc.)
    The problem with this agreement is that if a minor signs the agreement (without reading) near the age of majority but does not have a claim until after he or she is an adult, the agreement will most likely be binding since the minor failed to reject the terms.

    Joe Pomerening   [ 22:28, December 7th, 2011 ]

    @Burukan, Thanks for the clarification.

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