The big news that rocked the gaming world in 2011 was the lengthy outage of the Playstation Network, which lasted for 24 days and cost Sony millions in lost revenue and bad publicity. The reason behind the outage was a security breach that compromised over 77 million user accounts, which forced Sony to shut down their online service until the security threat could be neutralized. While there were no verifiable cases of actual theft or fraud, this didn’t stop people from suing over the breach of their personal data. Call it opportunism if you like, but people were definitely rattled by what happened.
In response to this, Sony updated their user agreement shortly after the dust settled. Mixed in with the usual legalese was a Class Action Waiver, which prevents people from suing the company if things should go awry. Anyone using the PSN nowadays is required to agree to these terms, and Sony is within their legal rights to include it. Microsoft followed suit shortly after that by imposing something similar, and now Valve is jumping on the bandwagon with the latest update to the Steam user agreement.
The updated agreement, which went into effect last week, requires users to agree to a new dispute resolution process that Steam has initiated. This means that any issues you have, up to and including demands for compensation, must be handled through arbitration rather than the courts. This means that you can no longer launch a lawsuit against Valve, nor can you join (or start) a class action lawsuit against them. Your choice is either a binding arbitration process or a round with small claims court, depending on the nature of your grievances. While this may scare off the opportunists who aim to make some quick cash from a bad situation, it does take some power out of the hands of consumers with legitimate concerns.
Valve’s reasoning makes sense, though for whom the benefit lies depends on your viewpoint. According to Valve’s logic, the majority of class action lawsuits are rarely merited and they only benefit the class action lawyers who make money off of them. This is true to some extent, as the courts are frequently inundated with nuisance lawsuits that waste time and money. However, on the flip-side, being able to hold a company accountable is one of our fundamental rights as consumers. If something goes wrong and we are subject to negative consequences, shouldn’t we be able to seek compensation on our terms? The updated user agreement suggests otherwise.
Those who are currently using Steam have already agreed to these terms, however it should be noted that the Class Action Waiver is not as iron-clad as it seems on paper. Some courts may circumvent this clause if exceptional circumstances arise, and the legality of this practice is being disputed in some jurisdictions. From a more optimistic perspective, problems such as the PSN outage are rare, so hopefully Valve wont be giving us a reason to want to sue them anytime soon.