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Microsoft To Block Class Action Suits Through New Terms Of Service

Microsoft said late last week that it has begun changing its user agreements to prevent consumers from filing class-action lawsuits against the company.

In a blog post authored by Jim Fielden, the assistant general counsel at Microsoft, the company said that it would take advantage of a 2011 Supreme Court case, AT&T Mobility vs. Concepcion [PDF], that allows companies to settle a complaint either privately or via small claims court, but can prevent the plaintiff from forming a class for a class action lawsuit.

Microsoft said that it had already updated the user agreement of its Xbox Live service to put its new legal strategy in place, and would extend that practice to other products and services over the next few months. That agreement, updated last December, drew the ire of columnist John Dvorak, who dubbed the provision part of the "boilerplate crap" that dominates user agreement. Dvorak said that those included "shrink wrap licensing deal" that bound the consumer if he or she opened a software package.

Sony also changed its terms of service in reaction to the law, giving it the sort of legal protection that it did not originally enjoy after hackers forced it to take down its PlayStation Network service last year.

"We think this is the right approach for both Microsoft and our US customers", Fielden wrote. "Our policy gives Microsoft powerful incentives to resolve any dispute to the customer's satisfaction before it gets to arbitration, and our arbitration provisions will be among the most generous in the country. For instance, we permit arbitration wherever the customer lives, promptly reimburse filing fees, and, if we offer less to resolve a dispute informally than an arbitrator ultimately awards, we will pay the greater of the award or $1,000 (£640) for most products and services-plus double the customer's reasonable attorney's fees.

"Most importantly, this approach means customer complaints will be resolved promptly, and in those cases where the arbitrator agrees with the customer's position, the customer will receive generous compensation, and receive it quickly".

Microsoft said that it will leave its 45-day refund policy in place, which includes the full retail cost plus $7 in shipping.