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Tuesday December 13, 2011 3:55 pm

New Xbox Live Terms of Service say you can’t sue Microsoft


Xbox Live TOS

Microsoft has wisely slipped a new proviso into the latest Xbox Live terms of service licensing agreement to prevent the kind of class action lawsuit Sony faced after the huge PSN data-breach and site downtime caused by hackers.

It's amusing since most of these agreements already take away the users' rights. The courts almost always uphold these supposed contracts, virtually giving any company the right to sell a faulty, or even dangerous, product.

Here is a snippet from the latest Xbox Live terms of service (TOS) :

"...if you live in the United States, you and Microsoft agree that if you and Microsoft do not resolve any dispute by informal negotiation ... any effort to resolve the dispute will be conducted exclusively by binding arbitration ... 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."

Note the "in the United States" proviso. Many foreign countries do not allow these sorts of contracts, but few make it easy to file a class action lawsuit so it is not as important.


I've always found the shrink wrap licensing deal—the root of all this—to be sketchy. You buy some software and once you break the seal, you have agreed to whatever is written in the license agreement. This evolved into the checkbox agreements you find online and the various terms of service that many websites have embedded in the site.

These tend to be boilerplate crap that basically say you cannot sue the website owner for anything, ever. Microsoft actually looks fairly magnanimous by allowing binding arbitration. I always assume this is only done as window dressing, since any agreement more onerous might be thrown out by the courts. Everyone in the industry is worried sick that the Supreme Court will look at all these agreements, which often have ludicrous provisos, rule them all as bullcrap, and negate them.

This article, written by John C. Dvorak, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.

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