J.R.McHale

From The Verge, how companies are limiting or eliminating the right to class action lawsuits against them in their terms of service:

“On November 1st, PayPal will follow Sony, Microsoft, Netflix, and many others in banning class action lawsuits by customers. Its new terms of service require any disputes between a user and PayPal to be resolved with arbitration, or in small claims court if they qualify. Unless users send a written opt-out notice, they’ll be barred from group suits in the US, something that’s become increasingly common for companies since last year … [T]here’s a simple reason why PayPal and others are making these changes: because they can. Until relatively recently, states could require companies to allow class action lawsuits in their terms of service. While not every state did so, the result was that companies wrote agreements to accommodate the strongest consumer protection laws and applied them across the board. In the April 2011 decision AT&T Mobility v. Concepcion, however, the Supreme Court ruled that the Federal Arbitration Act took precedence over state laws, letting companies add clauses that limit lawsuits as they see fit. Since then, these clauses have steadily been added to terms of service and licensing agreements, taking away the user’s right to participate in a class action lawsuit … Not every business can ban class action suits. Individual exceptions in separate laws let consumers bring them against insurance companies, mortgage loan providers, and (if you’re a member of the military) payday lenders. Other consumer protections still apply across the board. But for most companies, it’s common now to add a clause banning group suits, and we’re likely to only see more of them in the coming years.”