December 13th, 2016 | Tin Foil Hat Time | No Comments Yet
Weighing the pros and cons of binding arbitration, it is generally best for the consumer to not require binding arbitration for using a service. The major disadvantage of arbitration generally opens up a company to break ethics, policies, and laws all for services that are generally considered essential in our modern age, like computers, internet, and phones. A good middle ground is voluntary arbitration. This is when a company and consumer has the option to arbitrate a disagreement to come to a voluntary resolution if any dispute should arise. This method allows for an honest mistake by either party to not become a trial, violation, or issue but when a consumer or company believes the other party acted in poor faith, the possibility of a lawsuit is still on the table. To this end several activists groups have sprung up to defend consumers against binding arbitration. To the other extreme a law was proposed in the senate to completely remove binding arbitration. This is a Arbitration Fairness Act of 2015, but it has not been discussed in some time.
Unfortunately for the consumer, there is already a law on the books that covers arbitration, but it is the Federal Arbitration Act that limits arbitration only to contracts created before 1926. This bill was used to strip consumer rights and force the customers to pay all costs associated with the arbitration. The arbitration clause was challenged in California and defeated, but the company argued that the federal act trumped the state law. The new proposed law would overturn the Federal Arbitration Act, but as you read in the notes, it is a slow-moving act.
As the explosion of apps, web services, and electronic devices arrives on the consumer market most of them contain binding arbitration clauses. The worse part is that they have binding arbitration combined with the clauses that any or all of the terms can change at any time and continued use of the product or service implies your consent to agree to those changing terms. This is how Facebook suddenly made all of our private posts public in one day in 2012. These arbitration agreements even bleed over to phones, even exploding phones. The Galaxy Note 7 was rushed through production specifically to beat the iPhone 7 to the market. On page 18 of the Galaxy Note 7 manual, instructions were given about how to opt-out to the binding arbitration. How many people do you think read the manual and opted out? How many before the phones started blowing up? This is the problem with binding arbitration.
At least the Apple products at this time do not have binding arbitration on any of their systems, nor does the base Android platform, but Microsoft forces binding arbitration on all of their products and services. This means for the majority of computer users, if the company that is forcing updates, collecting telemetry, and freely handing off information to third parties cannot be held accountable to the courts of our land. We are allowing tech companies to bind us to arbitration, but we do not have to.
First, read all terms and conditions and weigh whether the service is worth the conditions and relinquishment of rights. Next, opt-out of all binding arbitration if you feel appropriate. The positive is the opt-out process is usually just an email, the negative is you need to provide full contact information to the company and we have no idea what that means in terms of our privacy. Third, contact your legislators to get the new pro-consumer bill passed which will greatly restrict many forced arbitration agreements. Finally, switch to products, services, and software you do not need to give away your rights to use.