If you have poked around on the internet or even used a few apps on your phone before reading this article, do you know what rights you have forfeited? With the proliferation of online transactions and new gadgets that we use in our businesses, we’ve been seeing a proliferation of “terms and conditions” agreements that we electronically agree to. If you buy coffee at Starbucks with a gift card, use Amazon, advertise on Yelp, or play Pokémon GO, you have just given up your right to go to trial by agreeing to go to arbitration.
The Seventh Amendment states:
In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.
You waive your Seventh Amendment right all the time without knowing it. Imagine if you logged onto a website and by doing so, waived your Third Amendment right and the government started putting up soldiers in your house the next day. Your objection that you never agreed to that is met with, “But you [used our app/logged onto our website/bought advertising credits/etc.].” But it happens every day multiple times a day with our Seventh Amendment rights.
The problem is not so much that people are clicking on the “I agree” button at the bottom of a pop-up window without reading all the way through. The problem is that what we are agreeing to is often buried in some footer link that goes to another link that takes us to a terms page that identifies what we are agreeing to. For example, when you buy things on Amazon, you are agreeing to this:
How do you find that? It’s easy. Go to Amazon.com and go down to the bottom and click on “Help.” Then, scroll down to the bottom of that page and choose “Other Topics & Help Sites.” Then click on “Security & Privacy” (even though arbitration clauses have nothing to do with security or privacy, but it’s the only catch-all topic). Then, under Legal Policies, go to “Conditions of Use.” From there, scroll down to the bottom to category of “Disputes.” That’s like walking into a bar and someone saying, “Don’t you know you agreed to get punched in the face? The notice is in bathroom behind the paper towel dispenser.”
Here’s what you give up when you use a Starbucks card:
Here’s what you give up when you advertise with Yelp:
Here’s what you give up when you play Pokémon GO:
Is It Really a Big Deal?
Are you really going to sue Starbucks because they made your coffee wrong? Or sue the makers of Pokémon GO because you can’t catch a mewtwo? Probably not. But, what if you buy your Starbucks card with a credit card and Starbucks keeps a database of your credit card info and contact info and stores that information on an insecure server and gets hacked and all of your credit card information is stolen? Or, what if they round up every charge and take an 85 cent overcharge on purchases made with your $10 gift card to fraudulently make a large profit on all consumers? Hypothetically, of course. Ordinarily, you would be a member of a class action, but class actions are not allowed in arbitration. So, you would be forced to either let Starbucks continue to do that (in this hypothetical situation), or pay thousands of dollars to arbitrate over 85 cents or over your damages for your hacked credit card information. In essence, companies have created a way to avoid large liability by simply telling you that they don’t want liability pinned on them.
What You Can Do About It
Before you sign up for some new service or new piece of technology or use any online services for your business, spend some time poking around to make sure you are not giving up any rights. Some companies, like the maker of Pokémon GO, give you the right to opt out of the arbitration clause if you follow the instructions in the terms and conditions page. So, read those rules carefully and make sure you know what you are getting into and how to get out of it.