Take a look at this image of a cell-phone displaying the registration page for the Uber ride-sharing app:
If you enter your credit card information and hit "REGISTER," have you given up your right to bring a class action against Uber if you think it has engaged in illegal price fixing? Yes, says the United States Court of Appeals for the Second Circuit in an opinion yesterday in Uber Technologies, Inc. v. Kalanick.
You see, if you had instead pressed the link for "TERMS OF SERVICE AND PRIVACY POLICY," and then pressed another link to yet another page, you would have reached what the district judge in the case (Jed Rakoff) described as "nine pages of highly legalistic language that no ordinary consumer could be expected to understand," and if you made it through seven pages of that gunk, at "the very bottom of the seventh page" you would find an agreement requiring you to settle any disputes with Uber through binding arbitration, and waiving your right to a jury trial and to participate in a class action.
Judge Rakoff had found that pressing "REGISTER" did not manifest assent to that agreement, but the Second Circuit held otherwise. Although in previous cases the Second Circuit has insisted that on-line agreements don't bind consumers unless terms of service are "reasonably conspicuous" and the action the user takes is unambiguously a "manifestation of assent" to those terms, the Court held, as a matter of law, that Uber's terms met those standards.
The court's opinion holds that assent can be unambiguously manifested even if the user does not check a box saying "I agree," and does not look at the terms or state that he has done so, as long as a link to the terms is conspicuous and the court thinks a reasonable user would understand that taking an action like pressing "REGISTER" consents to the unread terms.
The Second Circuit's past decisions show that if a company designs its user interface badly, a consumer may not be stuck with terms the court doesn't think she would have noticed. But the Uber decision shows how simple it is for a company to design an agreement page that will bind consumers to page after page of terms that everyone knows consumers will not read.
The Second Circuit's opinion says that reasonable smartphone users understand that they agree to terms when they use apps and that it is their choice if they don't bother to read them (as if any consumer had the time to read all the terms they are forced to agree to in order to conduct the transactions that have become routine in the digital age).
That same reasoning could be applied to provisions requiring consumers to turn over their children, or their immortal souls, to a company, but most courts would refuse to enforce such agreements (I hope!). But under the Federal Arbitration Act, giving up one's right to go to court is a different matter.
Let the buyer beware.
