Arbitration and Accountability

UPDATE:

This week I learned that Microsoft has included a highly objectionable binding arbitration clause in their new terms of service. The clause applies to all Xbox Live and Xbox 360 consumers who seek to recover any damages suffered as a result of Microsoft’s negligent or deliberate acts. Very simply, customers of Microsoft’s Xbox services cannot bring effective, wide-ranging legal action or join a class action suit against Microsoft.

Seemingly, Microsoft is following Sony’s tack and attempting to prevent preemptively any liability in case it experiences a security breach.

Furthermore, Microsoft is refusing to allow consumers to opt-out of the new clause in their terms of service. This blatant corporate strong-arming indicates that Microsoft is trying to force its customers to waive their right to hold Microsoft accountable for any future injuries they sustain. 

I will continue to fight for passage of legislation like the Arbitration Fairness Act and my Personal Data Protection and Breach Accountability Act to protect consumers from such abuses and neglectful practices.

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October 2011

Today, Senator Franken and I sent a letter to Sony regarding its attempt to avoid accountability for the massive data breach of its PlayStation Network in April. After allowing users’ information to be accessed by hackers and failing to promptly notify users of the breach, Sony has updated its terms of service with two provisions that essentially straightjacket consumers seeking redress. The new termsa binding arbitration clause and class action waiveressentially shut the door on PlayStation users who were injured by the breach and want to seek remedies from Sony.

When a company harms its customers, it needs to answer for its mistakes. Instead, Sony is trying to force its customers to waive their right to hold Sony accountable for any past or future injuries they suffer.

I’ve introduced and supported several bills to help consumers hold companies accountable. I was proud to jointly support Senator Franken’s Arbitration Fairness Act, which would ban the use of predispute binding arbitration clauses in consumer and employment contracts.

A provision in my Personal Data Protection and Breach Accountability Act would prohibit companies from using predispute binding arbitration clauses to avoid safeguarding their customers’ data or provide timely, comprehensive notification and remedies to customers after a breach. This provision would prevent companies like Sony from limiting their responsibility to their customers following a data breach. My bill was recently approved by the Judiciary Committee, and I will continue to push for its passage.

In the meantime, I encourage Sony PlayStation Network users to opt out of the arbitration clause and class action waiver in the new terms of service. Sony has made it needlessly difficult to do so, allowing users to read and consent to the new terms of service via their PlayStation but requiring a mailed letter to opt out. Fortunately, a web site has sprung up that will process users’ opt out requests and mail them to Sony.