by Brian Wolfman
The popular "cloud" storage service Dropbox has added a forced, pre-dispute arbitration clause to its standard consumer contract. As explained by Adam Levitin over at Credit Slips, Dropbox's clause also bans class actions, both in court and in arbitration. What I like about Levitin's post is that it stresses that the problem with forced arbitration is not so much that individual consumer arbitration is unfair — although often it may be — but that individual arbitration is not cost-effective for the vast majority of consumers, and so mandatory arbitration, particularly when coupled with a class-action ban, means that wrongdoing will go unaddressed and unredressed. Again, the real problem is not unfair arbitration, but little or no access to justice and, thus, little or no deterrence.
Dropbox is allowing its customers to opt out. As I've explained in prior posts (go, for instance, here and here), the right to opt out of a forced arbitration clause is a public-relations gambit. In fact, Dropbox would like to deny court access to as many of its customers as possible, while using the opt-out to pretend that its agreement with consumers is consensual. If Dropbox really wanted to give its customers a choice, it would allow them to opt for arbitration (or court) and individual (or aggregated) resolution post-dispute.