I know that lots of people have lots to say about this, so I’ll give a brief introduction. Sony Playstation Network and its associated online services released an update to the Terms of Service which explicitly states that users must agree to give up their right to sue and be a part of a class (as in class action law suit).  Not very surprising given Sony’s much talked about security meltdown.  Rightly so, many online media outlets such as PC World, BBC, and CNET, to name a few, have criticized this move by Sony.

However, I feel compelled to blog something about this because of one overlooked point: In the age of corporate giants, class action law suits are often the only way consumers can get corporations to listen.

Sure, there are consumer regulations– but, aside from a few consumer protection groups, it’s not like consumers have any lobbying power to affect the content of those regulations (or kill them right off).  Any let’s leave the pretense of “you can always vote with your feet and pocketbook.”  That argument misses the point– you, the individual, don’t matter.  Corporations aren’t interested in consumers or groups of consumers; they are interested in markets.  The funny thing about markets is that while dissatisfied customers are a part of that market, so are ignorant, apathetic, or PAST buyers.

And, that brings me to my point– once you buy a PS3, you HAVE to accept Sony’s Terms of Service to use it.

Sure, you can still play single player games, but the draw of the PS3 is that it is an networked new media platform.  You get to use stuff like Netflix, Hulu Plus, and so forth. You have to agree to Sony’s Terms of Service to use those services too.  Because of these services, once you buy a PS3, you’re still “in the market” as it were.  Unlike bread where I buy it, eat it, and that’s the end of it, the PS3 is like a service provider– once I pay for it, I am still paying for something– I’m still in its market. Similarly, other service providers also play this whole arbitration game.  But that’s also part of the point.  Once one behemoth decides that it can protect itself from class action by inserting these class action clauses, others follow.

Look, I’m not anti-arbitration.  Alternative Dispute Resolution techniques such as arbitration is great–at resolving conflicts, not being market indicators or creating norms. Take the cellphone industry, for example: All of the big U.S. carriers have those clauses.  It becomes normative– Industry practices, if you will.  So instead of the many banding against injustices inflicted by the gigantic few. It’s sort of like a UFC fight between a champion fighter and a kindergardener.  The 5 year-old doesn’t stand a chance– Now…. hundreds of thousands of angry kids– Let’s just say that’s even something Ken Shamrock would fear.