Updated Xbox Live TOS blocks class-action suits

In your haste to try out the spiffy new Xbox 360 dashboard yesterday, you might have missed an important update to Microsoft's Terms of Service agreement. Like Sony before them, Microsoft has now added language to its TOS preventing class-action lawsuits.

The updated TOS (via Gamasutra) warns users of the changes in binding arbitration policies in bold print at the very top, and the actual language can be found in section 18.1. It reads very similarly to the Sony TOS, promising to resolve disputes by binding arbitration, and giving up legal rights to litigate as a party or class member.

Kotaku reports that you can opt out of the clause by writing a letter or sending a copy of the pre-made form within 30 days to the following address: Microsoft Corporation, ATTN: LCA ARBITRATION, One Microsoft Way, Redmond, WA 98052-6399. Sony included a 30-day opt-out clause as well, also requiring a mailed letter.

These terms only impact those living in the US, mind you, and some states including Illinois, Ohio, and New Mexico are either actively opposing or investigating the matter on behalf of consumers.

These legal terms are becoming increasingly common, after the Supreme Court ruled that such agreements are enforceable in a case involving AT&T. Customers felt misled by advertising for free phones, but the SCOTUS overruled a Ninth Circuit court decision regarding the legality of class waivers.

Sony introduced its TOS months after being hit with a class action suits over the PSN data breach. Similarly, customers recently filed a class-action suit against Microsoft for unauthorized charges, led by a man who claims he was charged twice for the same year of Xbox Live. These TOS updates won't have an impact on currently pending cases, but it seems to be popular preventive measure from large corporations.