Guest Post by Gregory Gauthier:
Arbitration gag clause
Section 24.3.5 of the new terms states:
All documents and information disclosed in the course of the arbitration shall be kept strictly confidential by the recipient and shall not be used by the recipient for any purpose other than for purposes of the arbitration or the enforcement of arbitrator’s decision and award and shall not be disclosed except in confidence to persons who have a need to know for such purposes or as required by applicable law. Except as required to enforce the arbitrator’s decision and award, neither you nor Spotify shall make any public announcement or public comment or originate any publicity concerning the arbitration, including, but not limited to, the fact that the parties are in dispute, the existence of the arbitration, or any decision or award of the arbitrator.
The confidentiality provision in the new terms is not to be confused with the general principle that, in contrast to litigation, arbitration proceedings are not open to the public and arbitration papers are not public records. Rather, this gag clause goes much farther. Here are just some examples of the gag clause restricts core First Amendment activity:
- It may prohibit consumers from sharing information about previous Spotify arbitrations to better prepare for arbitration hearings against a business that already has all the information about all Spotify arbitrations.
- Some consumers dissatisfied with the arbitration process publicize faults they find in the arbitration process. Jon Perz created a website documenting his frustration with an arbitration proceeding with a car dealer. Nicole Mitchell and Debbie Brenner provided their narratives on their dissatisfaction with their arbitration proceedings and outcomes for the Alliance for Justice film Lost in the Fine Print. Yet, none of this robust commentary would be possible for consumers in an arbitration with Spotify, for Spotify users’ core First Amendment rights have been erased like “a pinky hitting the delete key”. Licitra v. Gateway, Inc., 189 Misc. 2d 721, 728 (N.Y.C. Civ. Ct. Richmond County 2001).
- Congress has regularly heard testimony from participants criticizing the fairness of arbitration proceedings in conjunction with bills limiting the scope of the Federal Arbitration Act (FAA). Yet Spotify can veto any attempt by fed-up consumers to tell their arbitration story before their elected officials.
- It is doubtful that a consumer dissatisfied with a Spotify arbitration could even submit complaints about the fairness of the arbitration proceeding to their representatives or administrative agencies. After all, Spotify could argue that government officials do not have a “need to know” about the complained-of arbitration.
- Most disturbingly, Spotify can use the aegis of the FAA to achieve what KlearGear could not: complete suppression of criticism. Suppose that a consumer makes a public complaint about Spotify. In order to erase this complaint, all Spotify needs to do is initiate arbitration about that dispute. Voila! Now, the consumer’s original complaint is “publicity concerning…the fact that the parties are in dispute” that is prohibited under the contract. Moreover, Spotify can “seek injunctive relief in a court of law” under Section 24.3.2 to obtain a court order gagging the consumer from talking about the dispute. At least the couple in the KlearGear case were only subject to the threat of a fine, not possible contempt of court, which Spotify users could face.