Study finds social media users are being stripped of legal rights
Wednesday, April 23, 2014
Users of social media sites such as Facebook, Instagram and Match.com are often — and often unknowingly — agreeing to give up their basic legal rights in disputes involving loss of privacy, disclosure of credit card information, rights of publicity, intellectual property rights and breaches of contract, according to two Boston professors who have studied the issue.
Social network sites get users to unwittingly “agree” to limit their rights by using a “browsewrap,” described in the paper as “an online standard form contract where a consumer purportedly manifests assent to the provider’s terms by simply accessing the website.” As a result the user “agrees” to terms without having to click a hyperlink or take any other form of action to indicate the terms were actively agreed to.
Rustad and Koenig found 71 of the 308 social network sites they investigated have TOU that prohibit users from taking any disputes with the site to court. “Our data confirms that these social networks devise ADR [alternative dispute resolution, such as arbitration] clauses that systematically foreclose user rights, while aggressively expanding their own legal options,” Rustad and Koenig wrote. “The great majority of arbitral clauses failed to explain that this private justice system forecloses basic rights such as the right to a written opinion, an appeal, discovery, or jury trial. Many TOU did not provide users with basic information when eliminating important rights such as joining class actions, conducting discovery, or pursuing small claims.”
In arbitration, disputes are decided not by a judge and citizen jury but by an arbitrator chosen by the social network whose decision is final. “Hundreds of millions of social media users are subject to arbitration filings before the American Arbitration Association [AAA] and the Judicial Arbitration and Mediation Services [JAMS],” Rustad said. “The cost of filing an AAA consumer arbitration is $200; JAMS charges $250. Since most arbitration clauses contain anti-class action waivers, it is not possible to join small dollar amount claims. When the cost of submitting to arbitration far exceeds potential recovery, no lawyer or economically rational consumer will initiate a case. Anti-class action waivers slam the door shut to any practical remedy.”
Further, the social network also dictates where the arbitration will take place; for instance, Rustad and Koenig point out Snapchat requires all disputes be heard by an arbitrator in Los Angeles, no matter where the consumer lives. “Modern technology easily permits non-appearance arbitration through the Internet or by telephone,” Rustad said. “But we found that few providers offer this or other alternatives that would level the playing field. The costs of travel, lodging, legal advice and other expenses associated with consumer arbitration makes it even more unlikely that consumers will arbitrate, much less litigate, their grievance.”