In yet another move to destroy consumer rights, Microsoft has joined EA and Sony by adding a “you can’t sue us clause” to the EULA for their latest dashboard update.  For those who don’t know how it works, the clauses state that any disputes have to be handled by mandatory arbitration and you can not join a class action lawsuit.  Companies love this as arbiters find in the businesses favor at a rate of >95%.  It’s not hard to see why.  The company pays for the arbiter and they use the same arbiters over and over again.  So why would the arbiters bite the hand that feeds them by finding in favor of the consumer.

 

Section 18.1.4. Binding Arbitration. It reads as follows:

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.

Section 18.1.6 reads:

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.

If you live outside the US you’re likely safe as most of the world has laws on the books that specifically prevent a company from taking away your rights in a EULA.  The US is not so lucky.  Most of the terms that are common in EULA’s have not been properly challenged in the courts to see if they truly are binding.  To see if these terms are binding it will take someone accepting the EULA and then suing MS anyway.  Due to the court costs involved it will take having the resources of the EFF to foot the bill.  If you would like to help get them involed they can be contacted here.

Until that happens though the only out is to write an opt-out letter to Microsoft within 30 days of downloading the update.

Send your letters to:

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

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