Over the last few days there’s been some talk about companies which stop customers from suing them either individually or as group. Does that apply to people who buy Microsoft Office?
The New York Times has a long piece on the move by a wide range of US companies have added to their ‘Terms and Conditions’ clauses words that prevent paying customers from, in extreme situations, taking legal action. In some cases, those limits are placed on staff as well.
In a lighter vein, The Good Wife on Sunday night (on TV in the USA. Episode 7.05 “Payback”) has two storylines based on forced arbitration, blocking of normal litigation and blocking of class actions.
While the NYT didn’t mention Microsoft, perhaps they should. The ‘Terms and Conditions’ for both Microsoft Windows and Office both contain clauses which prevent their customers from joining class actions or suing the company. Buying Windows or Office means you agree to use arbitration even though the rules you’re agreeing to aren’t very clear or readily available.
There’s nothing wrong with arbitration if it’s done fairly with a truly independent arbiter. Arbitration is usually cheaper than a full court hearing. As the NYT notes, in some cases the choice of arbiter (who makes the decision in the case) is made solely by the company. That means a company can choose someone who has bias or a conflict of interests, with the customer powerless to complain.
Office Watch is no legal expert (to put it mildly) but we’re told that the Microsoft arbitration terms are reasonable and fair. At least compared to the rules imposed by other firms. We’d be interested to hear the opinion of legally knowledgeable readers.
The Terms and Conditions (the former ‘EULA’) is quite explicit about forced arbitration and preventing class actions:
“You are giving up the right to litigate.”
In a dispute with Microsoft regarding Office your choices are:
- ‘Informal Negotiations’ – meaning talk to Microsoft directly.
- Small Claims Court – if appropriate
- Binding Arbitration
Details of the exact wording and sources is below.
It’s much the same for Windows though the wording is different.
Arbitration is compulsory and must be done on an individual basis. Class actions are forbidden, even group arbitrations.
Details of the exact wording and sources is below.
Around the World
All this is according to US law. The Terms and Conditions can be different in other places.
In addition, the T&C’s etc. aren’t the final word. The law and courts in your location can override any written conditions that a company might state.
Office 2013 / 2016 for Windows
” BINDING ARBITRATION. IF YOU AND MICROSOFT DO NOT RESOLVE ANY DISPUTE BY INFORMAL NEGOTIATION OR IN SMALL CLAIMS COURT, ANY OTHER EFFORT TO RESOLVE THE DISPUTE WILL BE CONDUCTED EXCLUSIVELY BY BINDING ARBITRATION. YOU ARE GIVING UP THE RIGHT TO LITIGATE (OR PARTICIPATE IN AS A PARTY OR CLASS MEMBER) ALL DISPUTES IN COURT BEFORE A JUDGE OR JURY. Instead, all disputes will be resolved before a neutral arbitrator, whose decision will be final except for a limited right of appeal under the Federal Arbitration Act. Any court with jurisdiction over the parties may enforce the arbitrator’s award.
CLASS ACTION WAIVER. ANY PROCEEDINGS TO RESOLVE OR LITIGATE ANY DISPUTE IN ANY FORUM WILL BE CONDUCTED SOLELY ON AN INDIVIDUAL BASIS. NEITHER YOU NOR MICROSOFT WILL SEEK TO HAVE ANY DISPUTE HEARD AS A CLASS ACTION, PRIVATE ATTORNEY GENERAL ACTION, OR IN ANY OTHER PROCEEDING IN WHICH EITHER PARTY ACTS OR PROPOSES TO ACT IN A REPRESENTATIVE CAPACITY. NO ARBITRATION OR PROCEEDING WILL BE COMBINED WITH ANOTHER WITHOUT THE PRIOR WRITTEN CONSENT OF ALL PARTIES TO ALL AFFECTED ARBITRATIONS OR PROCEEDINGS. “
Source: Microsoft License Terms at publication date there was no license available on that page for Office 2016.
You won’t find clear mention of these rules in the ‘Service Agreement’ available in the ‘About’ section of Office 2013 or Office 2016. At the very bottom of the Office 2013 Software Licence Terms is a non-clickable link to the Services Agreement (which can be changed by Microsoft at any time).
And it’s the same in Office 2016.
The relevant part is Clause 10.
“10. Binding Arbitration and Class Action Waiver if You Live in (or if a Business Your Principal Place of Business is in) the United States.
We hope we never have a dispute, but if we do, you and we agree to try for 60 days to resolve it informally. If we can’t, you and we agree to binding individual arbitration before the American Arbitration Association (“AAA”) under the Federal Arbitration Act (“FAA”), and not to sue in court in front of a judge or jury. Instead, a neutral arbitrator will decide and the arbitrator’s decision will be final except for a limited right of appeal under the FAA. Class action lawsuits, class-wide arbitrations, private attorney-general actions, and any other proceeding where someone acts in a representative capacity aren’t allowed. Nor is combining individual proceedings without the consent of all parties.“