Microsoft has recently rolled out the long awaited dashboard update to the Xbox 360, which includes new voice controls, new gesture controls, and a new terms of service agreement. Wait, a new TOS? Yup, not only is it mandatory to sign but it prevents users from suing Microsoft in the event that something happens to the Xbox Live service.



You can read the full terms of service agreement for yourself, but it pretty much states that you must agree to not sue Microsoft or be a part of a class action lawsuit if you want to use the Xbox Live service. Section 18.1.4 of the TOS goes into the meat of the legal jargon.

The bottom line of this new change is simple. Microsoft will handle, in house, any compensation or dispute when Microsoft messes up something or its services do not function the way it’s supposed to. No longer can these disputes be taken to court. You are at their mercy now, even if its their fault.

This isn’t the first time we’ve heard about Microsoft being sued over some Xbox Live issue. Back in August, a gamer by the name of David Stebbins filed a motion in federal court in an attempt to get Microsoft to pay him $500 billion dollars after he tried to amend his Xbox Live contact with Microsoft and was ignored when he asked for legal arbitration. According to Stebbins, the Xbox Live TOS is a standard contract that binds both the subscriber and the company equally. Therefore, Stebbin believes that he was technically equally capable to change the terms of service as Microsoft. So that’s exact what he did. He made some changes and sent the amendments with a notice to Microsoft saying “if Microsoft did not terminate his Xbox Live membership, such changes would take effect in 10 days.”

Microsoft also faced a lawsuit accusing the company of double-billing Xbox Live subscribers when they do not renew their subscription before it expires. According to the man filing the lawsuit, Microsoft’s prepaid subscriptions are “governed by vague and onerous terms of use.”

Sony also updated their terms of service clearing themselves from possible future lawsuits from users and companies. The new TOS agreement says: Any Dispute Resolution Proceedings, whether in arbitration or court, will be conducted only 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 action.” If the user does not agree with the new terms of service, then Sony will happily allow you to close your account and return any funds to you.

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