In the wake of EA offering to settle a class-action claim regarding its Madden NFL and NCAA exclusivity deals, Valve has modified Steam’s Subscriber Service Agreement to effectively prevent a class action suit from being leveled against the company.
“It’s clear to us that in some situations, class actions have real benefits to customers In far too many cases however, class actions don’t provide any real benefit to users,” Valve argued in a press release. “Instead [class action suits] impose unnecessary expense and delay, and are often designed to benefit the class action lawyers who craft and litigate these claims.”
“Class actions like these do not benefit us or our communities.”
In addition to class action suits Valve is attempting to block individual users from launching lawsuits against the company, further placing new language in the SSA to require users to settle disputes with Valve via small claims court or binding arbitration.
According to the SSA, “the arbitration will be governed by the Commercial Arbitration Rules of the American Arbitration Association”.
Interestingly, Valve says that it will pay for the cost of arbitration should the claim be under $10,000 and provided that the arbitrator does not “determine the claim to be frivolous or the costs unreasonable.”
If the user elects to pursue Valve in small claims court, Valve will not pay for the cost of arbitration.
While Valve says that this change is in line with other technology related companies — Microsoft (which includes an opt-out clause), Sony, and Electronic Arts — it may face a coup from a number of U.S states that are questioning the legality of such clauses.
Federally, with the ruling of AT&T Mobility v. Concepcion in April 2011, U.S Federal Courts have said that mandatory arbitration clauses are enforceable under the Federal Arbitration Act.
In Canada, however, mandatory arbitration has been largely nullified by the Supreme Court of Canada with the its ruling on Seidel v. Telus Communications Inc. Consumer protection legislation in Ontario, Alberta, and Quebec already prohibit mandatory arbitration clauses in consumer agreements.
Jennifer Dolman, a legal blogger and litigation partner at Osler, Hoskin & Harcourt LLP in Toronto, notes that following the court’s ruling with the Telus case “arbitration clauses may be more vulnerable to escape than previously believed”.
Valve has not yet responded to Hardware Canucks’ request for comment.