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Adinnieken on 26 May 2013
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VGKing said:
yo_john117 said:
VGKing said:
yo_john117 said:
VGKing said:

Not at all. There are greedy people out there, stupid lawsuits come up all the time. With an install base of 150m, how hard would it be to find a couple dozen people with the disc read error? With the power of the internet, anything is possible. 

If Sony knew they could win because their product had under industry standard fail rates they would have tried. The fact they settled is an admission of guilt.

A company will always try to lose as little money as possible and if they truly had under industry standard fail rates they would have fought it because they would have been able to win.

What if the time it takes to defend their product ends up costing them more than the settlement? Besides, who would want to drag out something like this in court?

That's probably the most unlikely situation. You don't settle in court unless you know there is a greater chance of you not winning then there is of you winning. A company will never settle when they can win. If their fail rates were actually under the industry standard, then they would have fought and most likely won the case.

It's bad PR. The longer this drags out, the more likely people are likely to find out about it and have this conception that Sony products break easily.
I guess its just a matter or perception. Either one of us could be right, or it could be a little bit of both.

No, yo_john117 is correct.

Uncertainty is the reason cases settle and this uncertainty can take several forms.  To lose a case that you don't know you can win, would open floodgates to higher damages or possibly more litigation.  Not to mention bad PR.  A settlement spares a company from guilt, puts them in control of damages (rather than a judge or jury) and because the contents of a settlement discussion can be sealed and are off the record, no one will ever hear or know the actual truth. 

This was exactly why Sony did what it did after the PSN breach.  By offering something to impacted users, it nullified the impact of any case that could be brought against it by a consumer.  Sony repaired any damage by offering credit insurance and by offering gifts worth a monetary value.  Some governments did file lawsuits against Sony for the breach, but that's a different story.

If a company is worried about litigation costs, it generally settles early on, before trial.   In fact, it's within a companies best interest to settle early.  Sony didn't.  They settle four years after the case was filed and a year after the trial began.  When a company settles after trial has begun, it's typically a sign that the case isn't going their way, is having a negative effect on business, or involves higher management that may know more details on the issue than the company wants to reveal, among other reasons. 

In this case, Sony likely knew the problem existed, and they likely knew that it would have a negative effect on sales if they lost in trial (cases themselves can have a negative impact, which is why many companies settle early).