Wednesday, June 13, 2012

Microsoft To Ban Class Actions

Microsoft is in the process of compelling  its many customers  to  give up the right to join in class actions. According to the Business Mirror:

The company has announced it’s changing many of its customer contracts to prohibit consumers from banding together in addressing grievances that might not be large enough to merit an independent lawsuit.

“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,” Microsoft’s assistant general counsel, Tim Fielden, said in a blog post.

“We made this change to our terms of use for Xbox Live several months ago, and we will implement similar changes in user agreements for other products and services in the coming months as we roll out major licensing, hardware or software releases and updates,” he said.

Do consumers get an even break when they engage in arbitration? There’s some evidence to the contrary:

Businesses generally prefer arbitration because settlements are limited and because professional arbitrators, whose fees are typically paid by the company in a dispute, tend not to bite the hand that feeds.

A 2007 report by Public Citizen found that, over a four-year period, arbitrators sided with credit card companies 94 percent of the time in disputes with California consumers.


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