Forced arbitration: Difference between revisions

'''[[wikipedia:Arbitration|Forced arbitration]]''' is a practice in which businesses can require their customers to resolve disputes through arbitration, instead of a traditional court system. Per Wikipedia: "Arbitration is a formal method of dispute resolution involving a third party neutral who makes a binding decision."

== Origins ==

Businesses will typically add an arbitration clause to their [[Terms of Service]] or Terms of Use. This clause generally outlines how disputes are handled between the consumer and the business. A good example of a typical arbitration clause can be found in [[Instagram]]'s Terms of Use, which, as of January 6, 2025, is under Section 7.4 - How We Will Handle Disputes:<ref name=":0">{{Cite web |title=Terms of Use |url=https://help.instagram.com/581066165581870/ |url-status=live |access-date=4 May 2025 |website=[[Instagram]] |archive-url=http://web.archive.org/web/20260222100652/https://help.instagram.com/581066165581870/ |archive-date=22 Feb 2026}}</ref><blockquote>"Except as provided below, you and we agree that any cause of action, legal claim, or dispute between you and us arising out of or related to these Terms or Instagram ("claim(s)") must be resolved by arbitration on an individual basis. [[Class action|Class actions]] and class arbitrations are not permitted; you and we may bring a claim only on your own behalf and cannot seek relief that would affect other Instagram users."</blockquote>Currently, in the United States, arbitration clauses such as this one are legal under the [[Federal Arbitration Act]] (FAA).<ref name=":2">{{Cite web |date=30 Jul 1947 |title=TITLE 9—ARBITRATION |url=https://www.govinfo.gov/content/pkg/USCODE-2019-title9/html/USCODE-2019-title9.htm |url-status=live |access-date=4 May 2025 |website=www.govinfo.gov |archive-url=http://web.archive.org/web/20260219114958/https://www.govinfo.gov/content/pkg/USCODE-2019-title9/html/USCODE-2019-title9.htm |archive-date=19 Feb 2026}}</ref> Efforts have been made, however, to prohibit forced arbitration, most notably the [[Forced Arbitration Injustice Repeal]] (FAIR) Act of 2023.<ref>{{Cite web |date=27 Apr 2023 |title=S.1376 - Forced Arbitration Injustice Repeal Act |url=https://www.congress.gov/bill/118th-congress/senate-bill/1376 |url-status=live |access-date=4 May 2025 |website=www.congress.gov |archive-url=http://web.archive.org/web/20251110183101/https://www.congress.gov/bill/118th-congress/senate-bill/1376 |archive-date=10 Nov 2025}}</ref>

The [[wikipedia:United_Nations|United Nations]] has published a guideline for consumer protections in 2016, which lists the following under IV 11(c):<ref>{{Cite web |date=2016 |title=United Nations Guidelines for Consumer Protection |url=https://unctad.org/system/files/official-document/ditccplpmisc2016d1_en.pdf |url-status=live |access-date=4 May 2025 |website=unctad.org |archive-url=http://web.archive.org/web/20260222170649/https://unctad.org/system/files/official-document/ditccplpmisc2016d1_en.pdf |archive-date=22 Feb 2026}}</ref><blockquote>"Businesses should provide complete, accurate and not misleading information regarding the goods and services, terms, conditions, applicable fees and final costs to enable consumers to take informed decisions. Businesses should ensure easy access to this information, especially to the key terms and conditions"</blockquote>

The practice of forced arbitration is one that is designed to revoke the rights of the consumer. In this case, the consumer's right to sue or participate in a [[class action]] against a business. Instead, the consumer must work with an arbiter of the businesses' choosing behind closed doors to resolve claims, which is widely believed to result in biased outcomes.

[[File:BadPiggiesArbitration.png|thumb|An example of forced arbitration, where the user has to agree to arbitration, regardless of if the software was previously installed on their device]]

*CNN Terms of Service, as of 2025-10-13 "14. CLASS ACTION AND JURY TRIAL WAIVER" <ref>{{Cite web |title=CNN Terms Of Use |url=https://www.cnn.com/terms0 |archive-url=https://web.archive.org/web/20251014030156/https://www.cnn.com/terms0 |archive-date=2025-10-13 |access-date=2025-10-13 |website=[[CNN]]}}</ref>

== Legal cases<!-- Want to add more? this baby is chalk full of them! https://www.centerjd.org/content/fact-sheet-cases-tossed-out-court-because-forced-arbitration-causes-and-class-action-bans#_ftn4 --> ==

|'''''G.G. v. Valve Corp., No. 2:16­cv­01941, 2017 U.S. Dist. LEXIS 50640'''''