CategoryArbitration

Ubisoft’s “Free” Offer to Assassin’s Creed Consumers Isn’t Actually “Free”

The world of video games is a tumultuous one.  Video game releases look more like big budget movie releases these days, and in some cases they make even more money. So a big problem with a big video game release can be big trouble, and Ubisoft’s recent release of Assassin’s Creed: Unity has been nothing but trouble.  The game was reportedly full of bugs,  and it got so bad that developers just gave users additional content for free. Millions of consumers, however, had already paid for that additional content in the form of pre-ordering a “Season Pass,” so Ubisoft had to offer another apology and another free game to appease consumers. This is known in the industry as “shining a turd.”

There is a little problem with this so called “free game” however. It’s ain’t free, even though Ubisoft unequivocally claims it is. Here is a screen cap of Ubisoft’s free game offer, in case they take the page down. I have used my amazing MS Paint skillz to highlight the “free” part:

assassins creed free bullshit

Here’s the catch: when you try and download the game, Ubisoft makes you sign a boilerplate “clickwrap” agreement that waives your right to sue Ubisoft for all of the tremendously awful problems with Assassin’s Creed: Unity. 

You hereby irrevocably and unconditionally RELEASE, WAIVE, AND FOREVER DISCHARGE AND COVENANT NOT TO SUE Ubisoft Entertainment S.A., and each of its past, present and future divisions, parent companies, subsidiaries, affiliates, predecessors, successors and assigns, together with all of their respective past, present and future employees, officers, shareholders, directors and agents, and those who give recommendations, directions, or instructions or engage in risk evaluation or loss control activities regarding the Campaign (all for the purposes herein referred to as “Released Parties”) FROM ANY AND ALL LIABILITY TO YOU, your assigns, heirs, and next of kin FOR ANY AND ALL CLAIMS, DEMANDS, CHARGES, LAWSUITS, DEBTS, DEFENSES, ACTIONS OR CAUSES OF ACTION, OBLIGATIONS, DAMAGES, LOSS OF SERVICE, COMPENSATION, PAIN AND SUFFERING, ATTORNEYS’ FEES, AND COST AND EXPENSES OF SUIT, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, ARISING OUT OF OR RELATED TO THE PURCHASE, ACQUISITION, RENTAL, POSSESSION AND/OR USAGE, AND/OR THE INTENT TO PURCHASE, ACQUIRE, RENT, POSSESS AND/OR USE, THE ASSASSIN’S CREED UNITY VIDEO GAME AND/OR THE ASSASSIN’S CREED UNITY SEASON PASS ON ANY AND ALL PLATFORMS, AND/OR RELATED TO THE CAMPAIGN, WHETHER CAUSED BY THE NEGLIGENCE OF THE RELEASED PARTIES OR OTHERWISE.

A settlement agreement is a contract and a contract by definition cannot be created without exchanging something of value. Waiving your right to sue Ubisoft for damages, or to participate in a class action, has value. That means this “free” download isn’t free, and Ubisoft is arguably creating yet another problem by engaging in false advertising in violation of a variety of false advertising laws, including California Business and Professions Code section 17500:

It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.

Ubisoft is intentionally “disposing of” (i.e., giving away or selling) property (the game) along with “inducing the public to enter into any obligation” (i.e., waiver of their right to sue) with “untrue or misleading” statements, namely, that the “free” download is “free,” when in reality the consumer has to waive their rights to sue.  This is illegal.

I am not sure what is sadder: that Ubisoft is this stupid or that we have become so cynical that internet outrage is basically limited to “well that sucks” type comments such as Game Informer’s comment that “these terms aren’t surprising.” Even Consumerist–usually on top of these sorts of scams–makes no mention of the legality of this clause. (They do accurately point out that this goes beyond the normal consumer fleecing we see in forced arbitration clauses, a favorite topic of mine.) Have we become so jaded that we simply assume a company can lie and tell us something is free when it plainly is not at all free?

How to Reject Consumer Arbitration Clauses

As I have previously blogged about, almost every single consumer contract with a big retailer or service provider includes a broad, sweeping waiver of your rights to a jury trial. Instead, these companies make you agree to arbitrate all disputes in a forum favorable to them. You have probably also waived your right to participate in a class action. This is bad for consumers and good for major companies. It lowers the company’s exposure in case they release a harmful product, and limits the rights of their customers in case of abuse or shady billing practices.  Basically, they don’t have to worry as much about treating you fairly. I think that stinks.

However, buried in many of these agreements is an opt-out. If you sign any new consumer agreement in the near future, or if you get an email saying your current agreement has been amended and you have the opportunity to review it, look for the arbitration clause in the agreement, and look for the opt out provision. It will likely require you to mail a letter to some address. Do it. Here is a rejection template:

Via U.S. Mail [or however the agreement specifies]

[address of recipient]

Re: Rejection of Arbitration Provision

To Whom it May Concern:

I am in receipt of your [insert name of agreement, e.g. “Amazon Store Card Agreement”]. Pursuant to [insert arbitration section, e.g. “Section III, “Evil Evisceration of Your Consumer Rights by Corporate Fatcats”] of the Agreement, I am rejecting the arbitration provision. I wish to retain my rights to a jury trial in State or Federal Court.

My information is as follows:

[name, address, account number]

Please let me know if you require any other information. Thank you for your prompt attention to this matter.

Very truly yours,

[happy customer]

That’s it. Pay attention to the information requested and include any additional information they request.  Also be sure to mail it in within the deadline provided, usually 30 or 60 days.

For the price of a stamp, an envelope, and a piece of paper you retain your constitutional right to a jury trial. Don’t let big  behemoth retailers and service providers like Comcast and AT&T and Amazon divide and conquer America’s consumer base–always sign and deliver arbitration rejections!

Whither the Arbitration Fairness Act of 2013?

On May 7, 2013, Sen. Al Franken (D-MN) and  Rep. Hank Johnson (D-GA) introduced S. 878, the “Arbitration Fairness Act of 2013.” It currently resides in the Senate Judiciary Committee, under the safekeeping of Chairman Sen. Patrick Leahy (D-VT). The current political climate leaves him little choice but to stow it away, as it would surely never pass. (Can anything pass? Oooh a bill for better sunscreen sure can! Way to go, Congress!)

This is unfortunate, since the Arbitration Fairness Act would eliminate forced arbitration from consumer, civil rights, and employee contracts, stating that “no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment dispute, consumer dispute, antitrust dispute, or civil rights dispute.” Forced arbitration has significantly eroded access to justice for consumers and employees, and it has done so right under almost everyone’s noses.

First a little background. The Federal Arbitration Act (“FAA”) was enacted in 1925. Its early history was not very exciting. By 1959 it had been cited in cases a grand total of 5 times in any state court.  In the past thirty years however, it has radically altered the landscape of consumer and employee dispute resolution.  It is the “tort reform” battle that has already been lost by consumers and employees.

There is a very enlightening (and sad, considering where we are now) history of the FAA in the dissent of Justice John Paul Stevens from the Supreme Court case of Gilmer v. Interstate/Johnson Lane Corp 500 U.S. 20 (1991).  In it, Justice Stevens notes that “There is little dispute that the primary concern animating the FAA was the perceived need by the business community to overturn the common-law rule that denied specific enforcement of agreements to arbitrate in contracts between business entities.” (Emphasis mine.)  The American Bar Association (the ABA) drafted the Act and actually testified during hearings on the Bill in 1923 that the FAA “is not intended [to] be an act referring to labor disputes, at all. It is purely an act to give the merchants the right or the privilege of sitting down and agreeing with each other as to what their damages are, if they want to do it. Now that is all there is in this.” (Emphasis mine, again.)  This was perhaps to allay the fears of many that the Act would be interpreted precisely as it is today, and would essentially gut the rights of employees and consumers in situations where they have absolutely zero bargaining power. Take, for example, the prescient comments of Senator Walsh of Montana, at these same hearings:

“The trouble about the matter is that a great many of these contracts that are entered into are really not [voluntary] things at all. Take an insurance policy; there is a blank in it. You can take that or you can leave it. The agent has no power at all to decide it. Either you can make that contract or you can not make any contract. It is the same with a good many contracts of employment. A man says, ‘These are our terms. All right, take it or leave it.’ Well, there is nothing for the man to do except to sign it; and then he surrenders his right to have his case tried by the court, and has to have it tried before a tribunal in which he has no confidence at all.”

The hostility in 1923 to the potential scope of the act was, perhaps, why the following was added to the version of the FAA passed in 1925: “[N]othing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.

Seems pretty straightforward. Businesses wanted knowledgeable arbitrators familiar with the vagaries of their industry, rather than potentially disinterested and hard to predict juries. Workers were carved out because it seemed unfair to make someone waive their right to a jury trial in a take it or leave it context, and juries and courts were more than apt to decide employment disputes since these involved regular people just like them. Bill passes, everyone’s happy.

This was, in fact, how the FAA was interpreted for the first half of the century. Circa 1956, three appellate courts had held that the FAA did not apply to contracts of employment.

What a difference the last 60 years or so have made. The FAA is now, clearly and unmistakably, enforceable against employees and consumers alike, via take it or leave it contracts  that hardly anyone ever reads. (What’s the point? You don’t have a choice.)  Buy a different product, you say? 95% of credit card agreements are subject to mandatory arbitration. Cable and internet? Time-Warner, Comcast, and AT&T all have mandatory arbitration agreements. Buying stuff online? Paypal has one.  Amazon has one. Do you put money in a bank, maybe? Basically every bank has one.  Do you listen to music? Apple’s iTunes has one. Popular media and video game vendor Steam has one. Reading this on Windows? Microsoft has one.  Netflix? Check. Hulu? Check. Google any major business and “arbitration” and you will see they have one, and you probably signed it without even knowing about it. (Google’s Terms of Service do not have an arbitration clause as of the date of this post. Hooray! But I only checked their all encompassing TOS, not any individual ones for Google Wallet, Play, and so on, which may be different.)

Almost every single national service or product supplier or employer has one. You cannot escape them, because why would any company let you  escape mandatory, binding arbitration? It is well documented that in both consumer and employment arbitration agreements, the consumers and the employees usually lose, or do not win as much as they could in court. Problems like the repeat player effect are well discussed by people way smarter than me, such as in Lisa Bingham’s excellent study “The Repeat Player Effect” (1997).

But it is not just the repeat player effect, at least not the simplified one many people argue about. (I.e., Joe Employee vs. the oft-sued Employer who happens to pay for the arbitrator’s mortgage thanks to the repeat business.) I am arguably a Plaintiff’s “repeat player” and even I dislike arbitration.  That’s because in my not so humble opinion, the problem is not just the whims of an arbitrator who knows where his or her bread is buttered.  I know and trust lots of skilled employment arbitrators and mediators.  The problem is that the process is tailored to these companies. This system is built and paid for by companies and employers and other large business entities with a vested interest in its success. (Like the National Arbitration Forum, which stopped performing consumer arbitration in 2009 after it was revealed they were owned by the very same debt collectors who forced consumers to use them.)

There is legally zero oversight or accountability over an arbitration proceeding. It is almost impossible to overturn an arbitration award.  Unlike a Judge, there is no real appeal. There is no public record.  You cannot ask a higher court to review a particularly harmful pre-trial ruling on a motion.  Discovery–far more critical for consumer and employee Plaintiffs than businesses and employers–is restricted, such as a de facto 1 deposition limit absent good cause (JAMS) or rules limiting paper discovery (AAA).  The “spirit of arbitration” (the phrase that I hear defense counsel crow when they think I am serving too much discovery) often works against the Plaintiff by design. And of course, most importantly, the employee or the consumer loses the right to make their employer or the business that wronged them face a jury of their peers. 

Arbitration is a major international business, and these companies have a vested interest in making sure the product they sell is wanted by their customers.  Their customers being, of course, businesses and employers who choose them as providers for their arbitration clauses.  This is not how it should be. We need our courts back. Call your congressperson and tell them to support the Arbitration Fairness Act. More on this in subsequent blog posts.

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