New E-Bay Aribtration Agreements with Its Customers Include Class-Action Ban (but with an opt out)

We posted recently about Microsoft's new arbitration clause with its subscribers banning class actions a la AT&T v. Concepcion.

Now, Ebay has amended its form contract with its users to do the same thing. But the contract has a twist. Users can opt out:

Opt-Out Procedure

You can choose to
reject this Agreement to Arbitrate ("opt-out") by mailing us a written
opt-out notice ("Opt-Out Notice").  For new eBay users, the Opt-Out
Notice must be postmarked no later than 30 days after the date you
accept the User Agreement for the first time.   If you are already a
current eBay user and previously accepted the User Agreement prior to
the introduction of this Agreement to Arbitrate, the Opt-Out Notice must
be postmarked no later than

November 9, 2012
.  You must mail the Opt-Out Notice to eBay Inc., c/o National Registered Agents, Inc., 2778 W. Shady Bend Lane, Lehi, UT 84043. 

The Opt-Out Notice must state that
you do not agree to this Agreement to Arbitrate and must include your
name, address, and the user ID(s) and email address(es) associated with
the eBay account(s) to which the opt-out applies. You must sign the
Opt-Out Notice for it to be effective. This procedure is the only way
you can opt-out of the Agreement to Arbitrate. If you opt-out of the
Agreement to Arbitrate, all other parts of the User Agreement and its
Legal Disputes Section will continue to apply to you.  Opting out of
this Agreement to Arbitrate has no effect on any previous, other, or
future arbitration agreements that you may have with us.

A couple thoughts. First, the opt-out offered by Ebay underscores that pre-dispute, take-it-or-leave aribration clauses are raw deals for consumers — and that Ebay knows it. Ebay is offering an opt-out to all of its customers, without asking anything in return. What consumer wouldn't opt out if he or she knew what that meant and opting out was easy? It's not as if Ebay would decline a consumer's offer to arbitrate down the road, when a dispute arose, if the consumer opt outs now. Opting out just gives Ebay's customers the option of suing or arbitrating — exactly what Ebay (or any proponent of pre-dispute mandatory consumer arbitration) wants to take away from consumers.

Second, it's obvious that Ebay wants to make it difficult for consumers who would like the option to sue. Ebay could have made aribtration opt in rather than opt out. That would be easy on consumers, but Ebay knows that no infomed consumer would opt in pre-dispute; again, an informed consumer would wait until a dispute arose and then decide whether to arbitrate–which Ebay prefers–or sue. Or Ebay could have allowed its customers to opt out just by replying to the email that it sent to its customers (like me) announcing the class-action ban, the opt-out right, and other provisons of its new contract. But that, too, would make things too easy. Instead, current customers have to opt out by sending a snail-mail letter containing detailed information postmarked by November 9. Why? Ebay wants to make it seem like it is attentive to its customers' interests (and that it values genuine contractual consent), while keeping a very tight lid on the number of opt-outs. So, how about a public mass-opt-out campaign encouraging Ebay customers to opt out? Anyone interested in joining in?

UPDATE:  Perhaps most onerously, to opt-out, Ebay requires that a customer sign the snail-mail letter to the company.

0 thoughts on “New E-Bay Aribtration Agreements with Its Customers Include Class-Action Ban (but with an opt out)

  1. Tuffy Rickabugh says:

    I spent an hour today on the phone with CS and Trust and Safety trying to determine why the mailing address was is a individual residence, of which I’ve found at least 4 other companies registered there. One real estate site even said the house was in foreclosure! So much for trust and safety!
    Headline: ebay, a fortune 500 company hires a guy whose too stupid a get PO box knowing he’s about to get thousands of certified letters!
    Imagine all your personal data sitting on this guys kitchen table ripe for the picking!
    These are the companies I’ve found operating out of this address
    M M P Finance
    Guild Mortgage Company
    Payday Loans Today
    2778 W. Shady Bend Lane
    Lehi, UT 84043

  2. anonconsumerlawyer says:

    This appears to me to be a very brilliant legal strategy to make the contract enforceable. Lawyers will spend the next few years slowly chipping away at Concepcion. All it will take is just a couple good district court opinions before that opinion starts to lose force. So this kind of arbitration agreement offers a “choice.” Because of that, I suspect it will be strong enough to withstand many of challenges to the enforceability of the agreement.
    On that note, I have not actually read the agreement, but I wonder if it is more unfair and one-sided than most. If that’s the case, this illusory opt-out provision actually could work to make what would otherwise be an unenforceable arbitration agreement enforceable. That is, perhaps the arbitration agreement is particularly anti-consumer and would be killed under normal public policy exceptions to their enforcement. But, if the agreement allowed for an opt-out, their defense lawyers have a better chance of saving the entire agreement because they can argue that the person had options, and chose arbitration.
    The whole thing makes my blood boil.

  3. vivcon says:

    Interestingly, I have recently quit selling for the same reasons. They no longer allow me to reject taking Paypal credit card payments, AND they auto-closed a dispute on an auction this summer: I had a non-paying bidder win 4-5 of my auctions and stiff me. My only option was to re-list, so I went to Craig’s list instead. I think Ebay has gone pro-buyer and I was tired of dealing with customer service agents overseas reading a script!
    I would LOVE the campaign, but that’s a lot of effort to battle a war that was lost via AT&T v. Concepcion.

  4. Louise says:

    I would have except that several years ago, I opted out of Ebay – permanently.
    I found out at my expense that eBay’s interest is with vendors, not buyers as the formers are their main source of income. They side in favor of the seller in a dispute by passive abstention. After months of waiting for a case “being reviewed” most cheated buyers give up.
    I also found that I do not need eBay, if I want an object, all I need do is contact the seller directly. That affords me a better feeling of who I am dealing with and often, I get a better response, even a better deal too.

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