Last month Dropbox, Inc. (an on-line service that stores and shares files) emailed its users updating them on some changes to its Terms of Service to include a forced arbitration clause. Most Dropbox users probably didn’t think twice about this seemingly small change. However, Dropbox knows what this change really means is that if Dropbox misuses data or breaks the law in any way; its customers are out of luck and can’t hold the company accountable in a court of law.
Dropbox describes arbitration as “a quick and efficient way to resolve disputes,” however; it fails to mention that forced arbitration is a private, secretive process that harms consumers. It guarantees none of the safeguards of our civil justice system for persons attempting to enforce their rights. Hired arbitrators do not have to comply with the law, and corporations have the benefit of being their “repeat” clients, leading to corporate bias.
Not only can Dropbox users not go to court but they can never bring or participate in a class action lawsuit against it. Basically, if it does something that harms all of its customers in the same way, each of them would have to separately bring a case, they couldn’t join together. Dropbox is banking on the fact that arbitrating an individual claim is often impractical or too costly for its customers to pursue. Ultimately these claims don’t get brought in arbitration or court; granting Dropbox a license to steal and violate the law without any repercussions.
What about the opt-out clause? Dropbox knows that many consumers do not read through the fine-print of contracts and that most Dropbox customers won’t see the opt-out term. Opt-outs are used by corporations like Dropbox to appear consumer-friendly but really just another way of denying consumers access to justice.
It’s time for corporations to drop forced arbitration.
What can you do?
First, opt-out and start saving money for a plane ticket to San Francisco (that's the place Dropbox forces you to go court if you have a dispute).