Arbitration was conceived of as a way to allow giant corporations to avoid costly court battles by meeting with a mediator and talking things out: but since the Supreme Court ruled (in a series of mid-1980s cases) that companies could force their customers and employees into arbitration by adding "binding arbitration" clauses to the fine print in take-it-or-leave contracts, the US justice system has gone dark, which an ever-larger proportion of legal action disappearing into the opaque bowels of the arbitration system, where the richest participant usually wins.
Binding arbitration crops up everywhere: when I moved to California a year ago, I had to go to four MDs and three dentists before I found one who'd see me without first making me give up my legal rights. If you play Pokemon Go, you've already given up your rights.
Nowhere is binding arbitration more universal than in telcoms: even Google Fiber got in on the act.
In a joint editorial in Time, Senator Al Franken and Democratic FCC Commissioner Mignon Clyburn call time on forced arbitration, pointing out that 99.9 percent of wireless subscribers have been subjected to arbitration agreements as a condition of service. This means that "with class action off the table, they know it’ll never be worth your while to take them to court, even when they are clearly in the wrong."
Franken has written legislation putting limits on forced arbitration, and Mignon has proposed a "regulatory crackdown" on the practice.
Why does that matter? Imagine you pay to upgrade to faster internet service, but find that your service keeps cutting out. Or imagine that a mysterious 99-cent fee starts appearing on your broadband bill, separate from the monthly rate you agreed to pay. Or imagine that you go to cancel your service, only to get hit with a $200 early termination fee you don’t remember agreeing to pay.
If you believe that you’ve been wronged, you could take your service provider to court. But you’d have to find a lawyer willing to take on a multi-national telecom provider over a few hundred bucks. And even if you won the case, you’d likely pay more in legal fees than you’d recover in the verdict.
The only feasible way for you as a customer to hold that corporation accountable would be to band together with other customers who had been similarly wronged, building a case substantial enough to be worth the cost—and to dissuade that big corporation from continuing to rip its customers off.
That is exactly why these mandatory arbitration clauses specifically prohibit class-action lawsuits: because they may be the only thing these telecom giants really fear. With class action off the table, they know it’ll never be worth your while to take them to court, even when they are clearly in the wrong.
Al Franken and Mignon Clyburn: How Your Internet Provider Restricts Your Rights [Senator Al Franken and Mignon Clyburn/Time]
Mandatory arbitration restricts rights of ISP customers, says FCC Democrat [Jon Brodkin/Ars Technica]
(Image: Terms of Service Agreement, Wesley Fryer, CC-BY-SA)