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Can Legality Actually Kill a Company?

It's no secret that legality has become a huge, huge deal in the United States. We have become a highly litigious society where a person will sue another person at the drop of a hat. Lawyers don't come cheap either. The best lawyers come a significant premium, even costing well into millions of dollars for the biggest companies.

Obviously, nobody wants to pay those exorbitant fees, least of all major corporations, so ensuring legality is enforced is super high priority in this companies. I can't blame them, but I also can't help but wonder...

Is legality actually killing companies?

I'm currently reading the book The New Rules of Marketing and PR, and the author, David Scott, tells an interesting story about Sony and Digital Rights Management (DRM). For those of you unfamiliar with DRM, it's basically the concern of locking down digital media like music so that only the purchaser can use it and not pirate it out to other people.

Back in the day, apparently, Sony required some crazy software to be installed on a computer because of DRM. People didn't like it because it was a hassle to use. Moreover, it was found that this software may make your computer more susceptible to malware.

People became pretty vocal about it online. They hated it! The issue snowballed, and the community watched and waited for Sony's response...

...

...

...?

It took a long time for Sony to respond. We can't know for sure why, but I can't imagine it was because they didn't care about their customers. No, I expect it was because their legal department was crafting a proper, appropriate response. I think this is evidenced by the fact that they did officially react much later, and here was their response:

To Our Valued Customers,
You may be aware of the recent attention given to the XCP content protection software included on some SONY BMG CDs. This software was provided to us by a third-party vendor, First4Internet. Discussion has centered on security concerns raised about the use of our CDs containing this software. We share the concerns of consumers regarding these discs, and we are instituting a mail-in program that will allow consumers with XCP software for the same CD without copy protection and receive MP3 files of the same title.

Man... if that isn't legal-speak, then I don't know what is.

The problem was that Sony allowed the issue to snowball online while taking time to craft their response. People weren't just upset about the issue itself, but they were angry about Sony's lack of response! Even though they did respond, the damage was already done: Sony's customers remained angry. So angry, in fact, that class action lawsuits began to spring up.

David Scott argues that if Sony had been quicker to respond, they might not have ended up in the pickle they're in, and in apt to agree with them. Regardless of Sony's true intention, Sony's delayed response sent an unintended message to its customers: we don't care. 

There's a big difference between in admitting to a problem and sharing that they're working on it and letting that problem fester with no response. I understand that Sony didn't want to say anything that would sink them, but their focus on legality landed them in a deeper hole.

Like all things in life, there's no clear answer to the issue. I understand that an organization doesn't want to go tossing out statements all willy-nilly, but waiting for a formal response like that isn't good either.

I think too many companies lean toward that latter option. What we all need to take into account is that the Internet doesn't sleep. Corporations might operate on a 9 to 5 schedule, but that's not how the rest of society works. And because of that 24/7, round the clock interaction online, things can snowball. Fast. 

I think people just like the idea that a human is working with them, too. I'm a collector of Nintendo's amiibo figurines, which can be extremely hard to find. People on Reddit have created a subreddit specifically dedicated to amiibo, and I don't know if they still do this, but they had one specific representative from Amazon sharing when new amiibo would come in stock. All interactions with him felt super natural, and I think I speak for all my fellow amiibo collectors when I say that we really appreciated his presence.


My encouragement to everybody out there is to find that balance. Don't let the legal community freeze you to the point that you never respond without first consulting a lawyer. In cases like Sony's DRM issue, it may be more detrimental to you NOT to respond.

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