Consumer class actions prevented with Microsoft’s new TOS

Category: Commercial Litigation

Michigan business owners may be interested in hearing an upcoming change that Microsoft is making to their company terms of service (TOS).

On Friday, May 25, Microsoft made an announcement that they would be altering their user agreements to reflect a new change the company wants to make that they feel will ultimately benefit their company. Microsoft is going to create new user agreements that will essentially prevent any consumer from filing consumer class actions lawsuits against them. Their inspiration for such a change comes from a case that the Supreme Court heard back in 2011 between AT&T and Concepcion.

The new user agreement will prevent a consumer class action lawsuit, but that doesn’t mean consumers can’t still have issues handled. Microsoft says that the new agreement will simply mean that consumers and the company will have to settle claims privately or within small claims court. The company says that their user agreements for Xbox Live have already been updated. While it was not specifically stated, the new agreement must be working for the Xbox Live service for the company to want to extend this agreement practice to alternative products and services, which will take place over the next few months.

Microsoft says that this move will reasonably increase the time in which a dispute is resolved. The company also handles disputes in the consumer’s locale. Microsoft calls their arbitration process one of the country’s most generous, but they plan to work out disputes before arbitration is necessary. They do plan to keep their 45-day refund policy in place.

Making a business move like this could ultimately help the overall reputation of Microsoft. In addition, it is a move that businesses in Michigan could consider. While it wouldn’t be a change that all business owners would want to make, ensuring that consumers can’t file consumer class actions lawsuits against the company and would need to settle any claims privately or in a small claims court could keep a lot of negative press buried.

Source: PC Mag, ” Microsoft’s New Terms of Service to Block Class Action Suits ,” Mark Hachman, May 25, 2012

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