In Sony's favor, Sony excluded small claims. So for pretty much everyone this arbitration clause is meaningless. The limit for small claims is in the thousands of dollars (depending on state) [2]. The circumstances where Sony would be liable for more than a few thousand to a single consumer would have to be pretty extraordinary.

Also in Sony's favor, Sony did not choose to use the arbitration clause to set an onerous jurisdiction. Sony could have said all arbitration needed to take place in a specific city in the middle of nowhere. Sony didn't even pick the location of its headquarters; you can pick any jurisdiction. Most arbitration clauses I've seen set a jurisdiction that favors the contract writer, so I'd say this puts Sony in a decent light for not doing the same.

If you really wanted to find fault with Sony's particular arbitration clause, it would be that it is binding. Neither side can appeal the decision of the arbitration panel to a higher court. But keep in mind this cuts both ways, and it really isn't unusual. It is even endorsed in the United States.

I should also note that arbitration clauses can be voided if the panel can be proven to be biased. So this isn't necessarily a license for Sony to circumvent the law, at least against a well funded opponent. And anyone with the balls to sue Sony for any serious amount of money would be a well funded opponent.

[1] http://en.wikipedia.org/wiki/Arbitration_clause

[2] http://www.nolo.com/legal-encyclopedia/small-claims-suits-ho...