Banned Xboxers Filing Group Action
Law firm going head-to-head with Microsoft
A US law firm is conducting an investigation on behalf of anyone who has been banned from Xbox Live as a result of using a modded console to play games online.
AbingtonIP has posted a form on its website allowing those gamers who can no longer access Live to register their interest in filing a class action against Microsoft. The firm is taking the approach that many of those who were affected should be entitled to pro-rata refunds from MS to make up for the time left on their subscriptions.
The form also notes that the timing of the ban was “convenient”, in that many people would have created new subscriptions or renewed old ones thanks to the release of Halo 3: ODST and Modern Warfare 2. Abington is claiming that sales of both games would have suffered if the ban had occurred earlier.
The document goes on to list additional reported problems that have resulted from the bans, including “disabling/altering Xbox functionality NOT associated with Xbox Live or piracy (HDD functionality for example), disabling/altering Xbox functionality NOT associated with piracy (Netflix, game add-ons, music and arcade games for example)”, and “obtaining information from Xbox consoles without permission of the owner”.
A statement at the end of the form reads: “As an aside, PIRACY IS A LEGITIMATE CONCERN for Microsoft and other content producers. HOWEVER, (to use a poor analogy) Microsoft has chosen to use one of the most indiscriminate “weapons” in its arsenal in an effort to combat piracy — as a result, use of this “weapon” has resulted in a great deal of collateral damage — many people were affected who had nothing to do with piracy. Furthermore, Xbox console functions that have nothing to do with piracy were also affected or disabled. Details aside, Microsoft’s bans could (and should) have been more measured.”
I have to say, I don’t think Abington stands much of a chance here. While I’ll defend anyone’s right to mod a console that they’ve bought with their own money,Live is a Microsoft-operated service, and as such the company does have the law on its side when it comes to saying who can and can’t use it. The collateral damage argument might carry some weight I suppose, but without seeing the reports first-hand it’s hard to believe that they amount to much more than the bitter tears of some gamers who have been forced to shell out for a new console so they can play MW2 online.

The fact of the matter is, most consoles are modded inorder to play pirated games.
If they name each one of the users band from the network, Microsoft can then bring legal action against each and every one of them under copyright laws both US and abroad.
I’m confident if you read the T&C’s for Live, and indeed your console, you will notice that Microsoft has already put something in there to allow them to take this action. They have a whole legal team at MS HQ, and they wouldn’t have taken this action if they didn’t think they could legal do it.