Confusion About the Updated Xbox Live Terms of Use, and a Proposal for Reform

Written by Joe Ross. Posted in Featured, Trends

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Published on December 08, 2011 with No Comments

I’m a gamer. I’m also a law student. That nexus makes me one of a small group of people who poured over Microsoft‘s new Xbox Live Terms of Use, implemented during this week’s Fall 2011 Dashboard Update. As Matt Brian of The Next Web reported yesterday, Microsoft requires Xbox Live users in the United States to give up their rights to sue individually or as part of a class action suit, restricting them to dispute resolution and then, if necessary, arbitration. You can’t continue to use Xbox Live unless you agree to the terms when presented with them after the automatic dashboard update. His post (and many others across the web) described how users could opt out by sending a letter to Microsoft within thirty days of agreeing to the new terms. He was relying on this portion of the new terms:

Your continued use of the Service is your acceptance of the changed contract, except that Section 18.1.11 permits you to reject changes to Section 18.1 (arbitration agreement) within 30 days of the change.

But then this morning I read a post by Ben Kuchera on Ars Technica about how Microsoft explained that the opt-out only applies to future changes to the Terms of Use, and you cannot opt out of giving up your rights to sue. The company responded to questions from Luke Plunkett at gaming blog Kotaku, saying users need to agree to all changes in the new Terms of Use to continue using Xbox Live. Period. (Microsoft’s entire statement on the issue is included at the end of this post.)

I read and re-read the relevant bits of the new Terms of Use myself and, even as a law student, it wasn’t immediately obvious to what exactly the opt-out provision applied. Yes, there are section numbers, but the fact that the opt-out is only available with regard to future changes just isn’t clear.

I was presented with the new Terms yesterday when I got home and fired up my Xbox for the first time in a while (alas, exams are upon us) and I laughed out loud. Specifically, I laughed at 1) how long the Terms are; 2) the fact that Microsoft offers no indication of how long they are (the way the scrollbar of a web page shows where you are in the page); and 3) the likelihood that few people without a law degree will be proactive or masochistic enough to actually read them. The Kotaku post does a great job of explaining the disturbing trend in tech companies including similar you-can’t-sue provisions in Terms of Use updates, and you should read that article.

The problem is clear, and I’m certainly not the first person to write about it: Terms of Use are usually prohibitively lengthy, reliant on legal terms of art for correct interpretation, and incomprehensible to many users. Really, companies should begin all Terms of Use documents with a simplified summary, digestible to lay folks, outlining what the Terms, or at least merely the most recent changes to the Terms, mean for users.

Creative Commons (CC) does a good job of providing this sort of human-readable standard for content usage rights. I use a CC license on my personal blog that lets people share my original writing as long as they attribute it to me and apply the same license to the work in which they’ve included my stuff. The license, called “Attribution-Share Alike,” includes a human-readable format as well as a more (unfortunately) familiar and lengthy “Legal Code” license, written in mind-numbing legalese.

The existence of the human-readable format does not supersede the legalese format, it just gives lay people an easy way to understand the rights they’re allowed to assert, and the rights they’re required to respect.

I don’t know how well this model would translate to corporate Terms of Use documents, but I suspect it wouldn’t be hard to include a human-readable summary at the top. You could appease nervous in-house counsel by preceding the human-readable summary with a disclaimer that nothing included in or excluded from the human-readable format serves to alter the rights and restrictions implemented by the full-length Terms of Use.

I should probably note here that I adapted KeyPulp’s Terms of Use from common language in those of several other large content-focused sites across the web. I tried to minimize legalese (and just minimize in general—our are much shorter than those from which they’re adapted) where possible, but our current Terms admittedly don’t adhere to my proposal. I call a mulligan, considering I just started thinking about this thing this morning. Regardless, I will eat my own dog food by coming up with a summary that does what I’m proposing in this post.

Human-readable introductory summaries would go a long way toward avoiding confusion like that caused by the Xbox Live update, and I urge Microsoft and other companies to consider something like it. I understand that they need to cover their asses and that Terms of Use updates are not per se a bad thing. However, any legally-binding agreement that is obviously incomprehensible to a majority of those to whom it applies has an acrid aroma of bad faith.

When it comes to services like Xbox Live and companies like Microsoft, a little respect for users goes a very long way. The first big company to do something like this would be seen as progressive and probably reap a very positive PR windfall from the initiative.

Let me know what you think about the problem, and my proposal, in the comments.

Microsoft’s full “clarification” of the Fall 2011 Xbox Live Terms of Use update:

Users must agree to the new clause to the Terms of Use in order to continue using Xbox LIVE. Changes to the Terms of Use are designed to ensure that our customers have an easy way to file a dispute without requiring formal legal action. They may now bring a dispute to our attention by filling out a simple Notice of Dispute form found at and mailing in documentation in support of their claim. We will then work to resolve the dispute to their satisfaction within 60 days. Any customer unsatisfied with the outcome of this informal process may easily initiate arbitration with the American Arbitration Association.

Customers may also choose to bring their claims in their local small claims court if they meet the normal jurisdictional requirements. For detailed information, please visit:

Image via Microsoft.

About Joe Ross

Joe Ross is one of the cofounders of KeyPulp. A law student, gadget geek and sci-fi fanatic, Joe also enjoys playing music, matching wits with kittens, and being proven wrong by his beautiful fiancée. Note: Joe writes about legal stuff sometimes. None of that is legal advice and it should never be construed as such. | 

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