Facebook Dumps Binding Mandatory Arbitration

by Greg Beck

As noted in a prior post, Facebook has been considering revisions to its terms of use in response to widespread criticism in the blogosphere. Facebook has now posted a proposed "Statement of Rights and Responsibilities" for its users to review. Instead of an arbitration clause, the agreement now states:

You will resolve any claim, cause of action or dispute (“claim”) you have with us arising out of or relating to this Statement or Facebook in a state or federal court located in Santa Clara County. The laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions. You agree to submit to the personal jurisdiction of the courts located in Santa Clara County, California for the purpose of litigating all such claims.

There are still grounds to complain about requiring users to submit to jurisdiction in California, but Facebook deserves credit for doing away with binding mandatory arbitration. Hopefully other companies will learn a lesson from Facebook and realize that consumers don't appreciate being required to give up all their rights.

Comments

[Guy Kingston]

I don't see how this is an improvement - well certainly not for everyone.

Take my case of example. I live in the UK. Facebook disabled my account due to an error at their end. Their customer service is so dreadful they will not respond to emails and I am unable to have any dialogue with them.

Now either I just accept I am banned form Facebook forever for something I didn’t do, or I have to issue legal proceedings in California. The cost and hassle of doing so is completely disproportionate to the nature of the dispute.

Whereas Arbitration is simple to set up and low cost. I am ambivalent about it being binding, though inclined to be in favour. If it weren’t then Facebook could completely ignore it. If it is and goes against me then I am no worse off than I am now.

I can see US law firms profiting from this change to the Terms of Use, but for private individuals outside the US it is dreadful.

[otto]

Okay, I suppose one should give credit to a company that does something that most other companies won't do -- even if what all the other companies do is very unfair. But the forum selection clause is terrible. Should Facebook be able to force a Maine customer to sue in California? In many cases, that's like having no right to sue at all. Sure, picking California is better than picking Delaware or the Yukon, but it's still awful.