Online retailers in the United States are increasingly requiring consumers to arbitrate disputes through their terms-of-service rules. According to an article recently published in a New York Times blog, the Upshot, approximately one-third of the top 200 retail websites operating in the U.S. now uses clickwrap or browsewrap agreements to ban class action lawsuits or to require arbitration of consumer disputes. A similar percentage of the top 500 most visited websites also includes a class action ban or mandatory arbitration for consumers. According to the Upshot,
The companies occupy all corners of the web: e-commerce giants like Amazon and eBay; popular dating sites, including Match.com and OKCupid; media companies like The Wall Street Journal and BuzzFeed (though not The New York Times Company); the online storage startup Dropbox; even brick-and-mortar retailers like Target and Domino’s Pizza, whose restrictions would apply if you purchased items on their websites, but not in their physical stores.
A few big, familiar web companies like Facebook and Google stand out by not limiting whether their users can sue.
Despite recent Supreme Court precedent, not all such terms have met with court approval,
The courts have reacted unevenly to such terms. In 2012, the online retailer Zappos tried to block a suit over a personal data leak by citing its browsewrap-style user agreement, but a Federal District Court in Nevada ruled that the link to its terms, located near the bottom of each page on the site, wasn’t prominent enough for users to have noticed. Today, the link is more conspicuous: highlighted in blue, it appears directly beneath the site’s login form.
But other browsewrap terms have held up in court.
Currently, the overall response to such terms of service appears mixed. Still, arbitration clauses generally speed up the dispute resolution process and help both businesses and consumers avoid costly and protracted lawsuits. Additionally, such contract clauses do not restrict a regulatory agency’s right to sue on behalf of a consumer for any alleged violations of consumer protection laws.
Photo credit: creecher94 / Foter / CC BY
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