Fielden argued that the policy switch "gives Microsoft powerfulincentives to resolve any dispute to the customer's satisfactionbefore it gets to arbitration," and that it means "customercomplaints will be resolved promptly." A Microsoft spokeswoman declined to elaborate on Fielden's blogpost. But despite the company's assertions of increased customersatisfaction, the reality is that Microsoft is telling people theycan stuff it if they want to join together in exercising theirconstitutional right to a jury trial. And the company has the full backing of theU.S. Supreme Courtinstaking out this arrogant, deeply consumer-unfriendly position.
"It's disappointing that Microsoft would do this, but it's notsurprising," said Christine Hines, consumer and civil justicecounsel for the advocacy group Public Citizen. "This is the trendamong companies, and it's been getting worse and worse." That trend kicked into high gear after the high court ruled in a5-4 decision last year that businesses can require arbitration— and prohibit class-action lawsuits — in their servicecontracts. The decision specifically involved AT&T but appliesto all companies in all industries. Businesses generally prefer arbitration because settlements arelimited and because professional arbitrators, whose fees aretypically paid by the company in a dispute, tend not to bite thehand that feeds.
A 2007 report by Public Citizen found that, over a four-yearperiod, arbitrators sided with credit card companies 94% of thetime in disputes with California consumers. Class-action lawsuits are often abused by settlement-seekingattorneys. But the fact remains that such lawsuits are the mosteffective way of holding businesses accountable for misdeedsinvolving relatively small amounts of money. If a Microsoft glitch resulted in Xbox users, say, losing only afew bucks each, it's hard to imagine anyone seeking a legal remedy.But a class action would potentially result in amultimillion-dollar payout by Microsoft, thus making clear to thecompany that its actions have consequences. "Ending class-action lawsuits allows a company to evadeaccountability for wrongdoing," said Hines.
"You're denyingconsumers their legal rights." And that, of course, is the whole point: tipping the balance ofpower in favor of corporations. Factor in the Citizens United ruling, in which businesses weregiven a green light to spend as much as they want on politicalcampaigns, and it's clear the Supreme Court is happy to defer tothe interests of those with the deepest pockets. The Consumer Financial Protection Bureau is considering a rule that would prevent banks, credit cardissuers and other financial services firms from forbiddingclass-action lawsuits. The Dodd-Frank Act signed into law by President Obama in 2010 gives the agency such authority.
But that wouldn't prevent a non-financial company like Microsoftfrom doing as it pleases, just as most phone and cable companiessimilarly would continue getting away with arbitration-onlyprovisions. That's where the Arbitration Fairness Act comes in. The bill was introduced last year by Sens. Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.), and by Rep.
Hank Johnson (D-Ga.) in the House. It would amend the Federal Arbitration Actto invalidate all arbitration clauses in consumer and employmentcontracts. In other words, it would block companies — all companies— from blocking class-action lawsuits. The bill has faced fierce opposition from theU.S. Chamber ofCommerceand other business lobbyists, and, according to PublicCitizen's Hines, "is not going anywhere at the moment." So Microsoft's barring of class actions will only serve toencourage other tech heavyweights to follow suit.
As it stands,people can file a class-action lawsuit against Google. They can file a classaction against Apple, and Facebook, and Twitter. Anyone want to bet how long that'll last? David Lazarus ' column runs Tuesdays and Fridays. He also can be seen daily onKTLA-TV Channel 5. Send your tips or feedback to firstname.lastname@example.org .
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