AT&T, Sony, and EA are just some of the big companies that have removed consumers’ rights to a class action lawsuit through an update of their Terms of Service or User Agreement. Since the 2011 Supreme Court ruling that upheld the practice in a case against AT&T, many other companies have been jumping on board. Sony did shortly after their hacking and downtime. Just recently, Microsoft’s Assistant General Counsel, Tim Fielden, announced Microsoft would be doing the same.
When a customer in the United States has a dispute about a Microsoft product or service, many of our new user agreements will require that, if we can’t informally resolve the dispute, the customer bring the claim in small claims court or arbitration, but not as part of a class action lawsuit.
Through a posting to the Microsoft on the Issues blog, Fielden has informed us of new user agreements coming soon. While Microsoft updated the terms of use for Xbox Live several months ago, this announcement tells us to expect them in the coming months with new products (Windows 8) and updates.
We think this is the right approach for both Microsoft and our U.S. customers. Our policy gives Microsoft powerful incentives to resolve any dispute to the customer’s satisfaction before it gets to arbitration, and our arbitration provisions will be among the most generous in the country. For instance, we permit arbitration wherever the customer lives, promptly reimburse filing fees, and, if we offer less to resolve a dispute informally than an arbitrator ultimately awards, we will pay the greater of the award or $1,000 for most products and services—plus double the customer’s reasonable attorney’s fees. Most important, this approach means customer complaints will be resolved promptly, and in those cases where the arbitrator agrees with the customer’s position, the customer will receive generous compensation, and receive it quickly.
While it is true that Microsoft is being generous with its potential rewards and class action lawsuits are usually long, drawn out affairs with lawyer’s taking a hefty chunk of the reward. It still seems underhanded that a company is allowed to remove the consumer right that is the class action lawsuit.
It’s also worth noting that we have a 45-day refund policy for certain Microsoft software or hardware purchased from a retailer which provides for a full refund and reimbursement of shipping costs of up to $7. (See http://www.microsoft.com/mscorp/productrefund/refund.mspx for more information about this return policy).