Sony is sued in US over 'no-sue' agreement Published duration 8 March 2012

image caption Sony changed its terms and conditions following a lawsuit over its decision to drop support for Linux

Sony is being sued for changes to its terms and conditions designed to prevent users from suing it en masse.

The class action lawsuit, filed in California, claims the changes force users to give up their legal rights and are unfair.

Sony said that it was legally entitled to make such changes to its terms.

The legal case will be watched keenly by other firms, including Microsoft, which has also introduced so-called no-sue clauses in recent months.

A Sony spokesman told the BBC: "We chose to make the changes after the Supreme Court clarified the law."

Legal precedent

He was referring to a judgement made in April which ruled that the network provider AT&T could block class action lawsuits arising from customer disputes and instead force customers to undergo an arbitration process.

Since the Supreme Court judgement, the precedent has been set for other companies to protect themselves against such lawsuits by making changes to their contracts with customers.

"Lots of people, including Microsoft, do this now," the Sony spokesman told the BBC.

He added that signing up to the agreement was "not obligatory".

People who wished to opt out of Sony's new terms and conditions had to write a letter to the company, he said.

He did not comment on the specifics of the lawsuit.

The claim was filed on behalf of all customers who had bought a PlayStation 3 and had signed up for access to the PlayStation Network (PSN) before the changes to the terms and conditions.

It argues that Sony's decision to institute a no-suing clause in its terms and conditions is an unfair business practice.

Sony made the change to its user agreement as part of an upgrade to PS3.

Compensation

It reads: "Any dispute resolution proceedings, whether in arbitration or court will be conducted on an individual basis and not in a class or representative action or as a named or unnamed member in a class, consolidated, representative or private attorney general legal action, unless both you and the Sony entity with which you have a dispute specifically agree to do so in writing following initiation of the arbitration," the agreement read.

The change followed an earlier class action suit brought against Sony in April 2010 after it removed support for Linux system software from the PlayStation 3.

Hackers had used the function to bypass the PS3's security software.

Sony said the decision was taken for "security concern", but claimants argued they should have been able to expect to continue to use the "Other OS" feature and deserved compensation.

A US District Judge granted Sony's motion to have the case dismissed earlier this month after finding that the users had "failed to allege facts or articulate a theory on which Sony may be held liable".

The ruling was based on the fact that the claimants could have continued using Linux by refusing system updates, and had not proven that they were entitled to an ongoing relationship with the firm after their warranties had ended.

Data leaks

However, the firm still faces a separate legal case involving its games console.

In April a class action lawsuit was filed against the company over privacy breaches after its PlayStation Network (PSN) and other Sony websites were subject to a series of hacks.

Millions of members' passwords and personal details were stolen including some users' encrypted credit card details.