How Mandatory Arbitration Cheats Consumers
A few weeks ago, the topic of arbitration clauses became a contretemps when General Mills tried the remarkably cheeky stunt of trying to assert that consumers who had downloaded coupons or simply liked the company on Facebook had given up their right to sue if they were harmed by using its products and could seek remedy only through “informal negotiation via email” or arbitration. The firestorm of criticism forced the food giant to back down.
But consumers and other customers, like small businesses, are increasingly being denied access to courts though the use of mandated “pre-dispute” arbitration clauses and these are often paired with class action waivers. Anyone who is familiar with libertarian ideas or “free markets” arguments about the virtues of reliance on contracts and markets as the solution to every problem can see how that fantasy simply isn’t operative. Consumers (and notice “consumers” as opposed to citizens) were already at a power disadvantage in doing business with large vendors, which is counter to the libertarian/free market fantasy that individuals can contract freely, as equals, and can rely on the courts to enforce their rights. As anyone who has applied for a credit card or checked a terms of service box on a software license knows, the “agreements” bear no resemblance to negotiated contracts; tehy are take it or leave it propositions. As a new article in the Nation elaborates:
In addition, individuals and small companies lack the financial firepower to go toe to toe with business behemoths in court. And these contracts are frequently designed to deny users access to the judicial system.
More at http://www.nakedcapitalism.com/2014/07/mandatory-arbitration-cheats-consumers.html .
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