by Brian Wolfman
Earlier this year, we told you (here, here, and here) about eBay's terrible new arbitration clause that bars its customers, both sellers and buyers, from participating in class actions against the company. The new clause came with a cynical twist: eBay allowed its customers to opt out of the clause within a tight deadline if they sent a snail-mail letter to the company containing a bunch of specific information. The right to opt out was all corporate double-speak from eBay. If eBay really wanted to give its customers a choice, it would have let them choose an arbitral or judicial forum when their disputes with eBay arose. At the least, eBay could have allowed its customers to opt out via an email reply to the company's email announcing the new policy, rather than by snail mail. But eBay just wanted to give its arbitration clause the aura of consent when, in fact, it was driving the clause down its customers' throats.
Now, as The Consumerist explains here, the photo-sharing company Instagram is following in eBay's footsteps — with a pre-dispute binding arbitration clause and a class-action ban, along with a largely illusory opt-out provision. (The Consumerist is trying to organize an opt-out campaign against eBay, just as Public Citizen did against eBay.)
But the Instagram aribtration clause is even worse than eBay's. As The Consumerist notes, Instagram's clause bans its customers' participation in an Attorney General's (or other public official's) representative action, such as an action brought under the California Business and Professions Code. After banning class actions, the Instagram provision goes on to say:
You also agree not to participate in claims brought in a
private attorney general or representative capacity, or consolidated
claims involving another person’s account, if Instagram is a party to
the proceeding. [emphasis added]
Many state high courts, I believe, would think of this ban on participation in all representative actions (and the way it is being extracted from consumers) as unconscionable and, thus, unenforceable. Instagram's ban strikes me as a serious affront to state consumer enforcement policies around the country. Would the U.S. Supreme Court require the ban's enforcement under the Federal Arbitration Act even if a state supreme court found it unconscionable? Perhaps we'll find out.
0 thoughts on “Instagram’s Binding Arbitration Clause Could Be the Worst Ever: It Seeks to Kill Off All Representative Actions”
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I also tried in vain to remove my account from PayPal but it was a difficult hacking process and I found that it kept reappearing anyway, so I notified my credit card to block both eBay and PayPal sites.
I cannot understand what the fuss is all about. If one finds that a website is crooked, just drop it. EBay is not an obligation like the DMV or the INS, one can live without it.
Four years ago, I discovered at my own expense how one-sided this website was and I wrote to say that I would stop patronizing it. Of course they could not have cared less but I did it, anyway. I also tried in vain to remove my account from PayPal but it was a difficult hacking process and I found that it kept reappearing anyway, so I notified my credit card to block both eBay and PayPal sites.
I do not miss eBay at all, I use several other sites such as Craigslist for trade and I do not have to give personal financial details that leave me at the mercy of a potential fraudulent usage. If you are smart, you can even use eBay through the backdoor without the site ever getting involved in the process.
People are so conditioned to have “Big Brother” coming to the rescue that they do not use any self-initiative. The only way you can beat these abusive electronic monster sites like eBay/PayPal and Facebook is by using your veto power. Stop complaining and start walking.
This being said, these arbitration clauses are pernicious in nature and they should be opposed as promptly and forcefully as possible.