Americanism strikes again. Yesterday, Valve updated their Steam user agreement. If you’re a Steam user, you’re now prohibited from suing Valve in a class action. The good news, however, is that Valve will pay the costs of you and them having a private, gentlemanly tiff. That is, if you accept their choice of judge: the American Arbitration Association, with offices in every American mall.
Now, if Steam locks me out of seeing Kelly in Mass Effect 2, I may well be pissed enough to fly all the way to America. However, if something goes wrong for the rest of you, you’re out of luck. Valve won’t be paying the costs for you to sue them. And they’ll probably still try to argue that you can’t bring a class action lawsuit, either.
So… what will happen if you find cause to sue Valve? Let’s talk it through, starting with America: the land where everything begins.
These agreements ARE enforceable
“I can’t sign my rights away!” says a random commentator on every EULA piece I’ve ever written. Well actually, you can – in America. The issue was decided by the United States Supreme Court in the landmark AT&T Mobility v. Concepcion case of 2011.
AT&T sold a phone to Vincent and Liza Concepcion, advertised as free but coming with a hidden $30 sales tax. $30! You could buy ten bags of pretzels for that.
One thing led to another, and soon a horde of pretzel-less, angry customers were descending on the courts in a class action. Anyway, the sales contract had a term prohibiting a class action, much like Valve’s new thing.
To cut a long and probably boring story short, the Supreme Court found the term enforceable, and the class action failed. Crap. No more pretzels.
The case is important because previously, such terms were generally limited to employment contracts. But now they can be in all kinds of contracts, including the contract you have with Valve for using Steam. And the American courts will enforce them, requiring you (if you’re American) to pursue the arbitration, not a class action.
The only times when American courts haven’t enforced class action waivers is when the terms were unfair, such as requiring the customer to always pay the costs of arbitration. This is why Valve offer to pay all arbitration costs: they don’t want their contract thrown out of court.
But will Australian courts enforce the agreement?
“I can’t sign my rights away in Australia, though!” you might say. Well… Australian law says both yes and no.
First, several state and federal laws say that Australians are entitled to bring class actions. That would be the strongest argument for saying the new Steam agreement does not apply to you.
However, we also have the International Arbitration Act, which directly contradicts this. It says that courts are required to refer cases to arbitration where a valid arbitration agreement exists. Several recent Australian court decisions do favour arbitration strongly, so, my guess, if push came to shove, the International Arbitration Act would win out.
If that happened, the main limit on Valve’s agreement would be the Australian Consumer Law, which says contracts can’t include unfair terms. Obviously, having to fly to America to resolve your dispute with Valve would be unfair.
The most likely outcome would be a court finding the American-centric terms are unenforceable, leaving us with the bolded “YOU AND VALVE AGREE TO RESOLVE ALL DISPUTES AND CLAIMS BETWEEN US IN INDIVIDUAL BINDING ARBITRATION.” That is the sum and substance of the new Steam agreement for Australian gamers. Nothing unfair with that, so you’d still have to sit down to arbitration.
Valve is jumping on a bandwagon, and we should be concerned
Valve justified its new agreement with a statement that, among other things, claimed that lawyers are money-grabbing bastards. It then went on to say that prohibiting class actions is cheaper for the whole community.
My problem with this is that class actions have a real, justified place in our legal system. Doctors now report child abuse after the landmark case of Landeros v Flood. The case wasn’t brought for profit; it was to stop doctors wimping out of their responsibilities.
Class actions are also justified when a company has done substantial wrong, but the victims have no money to bring individual lawsuits. The best example would be a superannuation company shafting retirees out of their life savings. In such a case, black and white arbitration is not suitable, and neither is individual legal action.
On this note, Valve’s ‘it’s for the greater good’ statements read like PR spin. Valve did not craft their agreement with the gaming community in mind: they’re jumping on the bandwagon of American companies in every industry having these agreements. And by doing this, they increase the strength of such agreements across a wide range of industries—medical, insurance, superannuation, and everything else besides. The more companies that use these agreements, the stronger they become.
Class actions can be a waste of money, but the problems usually lie at other stages of the process, such as insufficient gatekeeping to prevent frivolous claims from gaining legs. It’s these problems that need addressing, not denying class actions as a whole. At this rate, we may end in a situation where companies get to do whatever they want and no one can stop them.
Disclaimer: Anything written here is online opinion. As always, you should seek your own individual advice if you wish to pursue any personal matter.