The new Pixel phone has a bizarre, obscure "opt out" arbitration waiver


#1

Originally published at: https://boingboing.net/2018/10/21/beware-the-leopard.html


#2

I am not a lawyer, but my understanding of contract law requires that you be a party to a contract for it to apply to you. Do you have to sell your soul to Google to buy a Pixel 3? If not, then you shouldn’t have to opt out of anything to retain your right to sue.

Can any lawyers out there help me out with this one?


#3

In a rational world you’d be right. Contracts are supposed to be a meeting of the minds, where two parties agree on terms. And arbitration is supposed to be a voluntary choice between equal parties. Unfortunately, case law and a Federal law encouraging arbitration have been corrupted into a process where corporations get to put unilateral arbitration clauses into all of their consumer contracts that allow the corporation to opt for a completely separate system of law where they control the rules and the judges - they literally get to pick the judges, and under arbitration law, the judges don’t actually have to decide based on the law. These corporate contracts can also, by fiat, prohibit consumers from coming together as a class to bring cases. This essentially makes corporations immune to being held accountable for outright theft and fraud even when committed on an industrial scale, because it can cost more to bring an individual arbitration action than the recovery will be. And arbitrators find in favor of their repeat clients (the corporations) the vast majority of the time, and any that don’t don’t get hired again. The incentives are overtly perverse.

Yeah, so I’d say this is legal, under current interpretations of current laws. And it’s outrageous. But at least there is an opt out, even it if it is hidden. That’s more than most contracts offer :frowning:

(Another outrage is the consumer contracts also tend to have a clause that says the corporation can change the terms of the contract at any time, with no coresponding right granted to the consumer, making all of the reast of the contract’s language superfluous. It should just say “The consumer agrees to anything we say, whenever we say it.” That’s really the essence of the whole contract when it contains the unilateral ability to change terms.)

IANAL, though.


#4

I’m all too familiar with that whole cesspit, but in this case, where’s the contract? If you buy a Pixel 3 at retail, you don’t need to sign a contract with Google.


#5

IANAL, but I took a course on contracts (so if you take this as legal advice you are stupid and deserve stupid things to happen to you). This is a form of adhesion contract, i.e. it “sticks to” you where you have limited ability or no ability to negotiate terms. You are a party because you complete an act that gives rise to a promise. You hit “OK” or start using the phone. The contract states that by doing so, you are party. You have consideration in the form of the phone or service provided by the phone. This kind of contract is not, in itself, illegal, as case law has demonstrated time and time again. It can be rendered illegal through unconscionability (for example inserting a clause about you now owing them millions of dollars), but arbitration has never been considered unconscionable by the courts, in part because of the Arbitration Act, which through case law the SCOTUS has pretty much ruled to be superior over numerous other laws. Repealing or fixing the Arbitration Act is difficult, but possible, and is honestly our last best hope to keep this nonsense contained.

That being said, arbitration can save people money versus going to court. The arbitrators may be picked by the companies, but AFAIK you do pay them alongside the companies in most of these contracts. Compared to court costs and filing fees, this can be considerably less. Now with that said, there are bigger access to justice issues where there is essentially no limit on how much you can spend fighting things in court and people with deeper pockets can simply outlast smaller plaintiffs, and while lawyers do take things on contingency, they are incentivized to take small risks, since they have to eat the costs of failure.

What’s needed is something no one seems to have time for: A robust system that prevents people from being exploited in and punished by civil law proceedings long before a judgement is made.


#6

The contract can be when you open the box (shrinkwrap) or when you turn on the phone and click “agree” to use it (clickwrap), or both. IIRC, I think at least one shrinkwrap contract failed in court but others have succeeded, and clickwraps have been found to be valid, but it can depend on the specifics of the contract and other confounding factors.


#7

Yes, both sides may contribute to the arbitration fees, but getting hired for repeat business requires finding for the repeat customer, which is always the corporation. So it really doesn’t matter, incentivewise, if the consumer pays a portion of the arbitration fees.


#8

Indeed.


#9

But at least there is an opt out, even it if it is hidden.

Doubtless there is data collection here that would fall under the protection of GDPR. That would very much put any opt-out mechanism at risk of violating Article 7 (defined in Article 4) of the GDPR:

https://www.privacy-regulation.eu/en/article-7-conditions-for-consent-GDPR.htm

So this is a risky legal maneuver for Google during a time when they shouldn’t be taking risks, least of all in the EU.


#10

This is getting REALLY beyond the pale now, but how does the counterparty demonstrate that it was in fact the named customer who “agreed” to the clickwrap / shrinkwrap? Or that the original “contract” said what they claim it said at the time? (A “subject to change” clause isn’t sufficient because how do you prove it was there at the time of agreement?)


#11

All good questions, generally successfully answered by “we have more money and lawyers than you do”.

I’d say courts tend to start with the presumption that the contract is valid, and give corporations the kind of nearly unquestioning deference over consumers in civil court that they give LEOs over suspects in criminal court.

Just look at credit reporting and collections. They all assume a valid contract, regardless of whether they have a copy.


#12

clarification: Google uses the wording: “user located in the United States”. It’s my understanding that this would include EU citizens on a visa in the U.S. etc.

https://support.google.com/store/answer/9141778#pixelarbitration


#13

one might think that, however the u.s. supreme court ruled definitively that businesses can force you to waive your right to the court system and accept arbitration even if you have no other option. even if you have no way to express your displeasure at the absence of a choice. the court did this a year ago.


#14

Yes, they did that, but wazroth is pointing out that the contract doesn’t apply to someone who didn’t actually agree to it via one of the dodgy “you agree to this contract by [unboxing/clicking/glancing in the direction of the product]” actions. So, how does Google prove who the person who agreed to the contract is? There is no signature or proof of identity of the person supposedly agreeing to the terms and conditions. And, for example, if I buy a used device that had a shrink wrap contract the original owner agreed to, I’m not bound by that contract. I think corporations have gotten around that issue largely by using the very effective legal doctrine of “Our Well Funded Lawyers Say It Was You!” (That and click wraps often require sign ins that link to an email account or some such.)


#15

Yes, because EU laws apply within the EU and not in the USA. If, as an EU citizen, I buy a device in the USA (or Russia, China, etc…) local laws apply. If I am unhappy about the product, I need to act in the country it was bought. Territoriality is a basic principle of law.

BTW, the contract says “only qpplies in the US”, because that legal abomination called "arbitration only exists in the US. Other countries do not let their citizens waive their legal rights.


#16

I don’t know what your problem is Cory, the instructions for opting out of binding arbitration have been on display at Google’s legal department in Alpha Centauri for fifty of our earth years.


#17

Well… if you lie about it, it’s fraud… so don’t lie about it.

My personal experience is that this is not true. If the collections agency doesn’t have your signature on any paperwork (which they often don’t) you can tell them to go pound sand. And I have. This is because certain kinds of contract absolutely require reduction to writing and the inability to present the contract on the part of the plaintiff (barring an admission on the part of the defendant) is going to give them a real hard time. Actually, they often drop the case when this happens. The problem is that a lot of people are easily intimidated by these agencies, and when you do have a suit filed against you, the first you’ll hear of it is in the form of pounds and pounds of letters from local bankruptcy attorneys telling you that now is the time to declare bankruptcy.

EDIT: Also, if they wait too long (which many collections agencies do) then even if you owe the debt, you can look up the statute of limitations in your state and again… tell them to go pound sand. BUT if you don’t have a lawyer and don’t know how to fill out an answer properly at the pleadings stage, you could very well accidentally affirm the debt.

Translation: I am not a lawyer and if you’re in trouble you should totally hire one, because if you decide that a BoingBoing commenter is the best source for legal advice, you are totally not making great decisions in life and should give someone money to help you make better ones.


#18

You misunderstand the issue here; I cited the GDPR and Article 7 for a reason, and was not actually worried about arbitration for EU citizens, just the opt-out data collection that accompanies it.

If Google keeps a list of users who have not opted-out, and they didn’t have a clear consent mechanism for such data collection, and some of them are EU citizens, this could mean GDPR violations… the specific circumstances of the transactions would likely be the deciding factor.

We’d need to know more, of course, but like I said earlier, it’s not a good time for the company to be playing with fire.


#19

Product registration and warranty info are not subject to GDPR.


#20

If you decide that you should give a BoingBoing commenter money to help you make better decisions, I’m here for you.