

Instagram's New Arbitration Clause and How to Opt Out - courtneypowell
http://blog.publikdemand.com/instagrams-new-arbitration-clause-how-to-opt-out/

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saurik
I pointed this out when PayPal made the same change, and I'm going to do it
again: if you actually think that you are likely to end up in a legal battle
against a giant with a lot of money, you probably _want_ arbitration instead
of lawsuits, and in fact that is what you will be fighting to get everyone to
agree to that when you start your suit.

The reason is that otherwise you just end up playing a game where the really
large entity files a bunch of motions you have to reply to, and your lawyer
starts billing you in the 5-6 digits before you've even had a chance to make
your case to the judge. For most individuals (or even small companies) this
might cancel out whatever you are trying to accomplish with your lawsuit.

It also means that you are able to handle the issue from home, possibly from
your house, without having to deal with a lawyer in the Delaware (PayPal) or
California (Instagram), and you can do this without having to first have a
complex battle over where the jurisdiction of your argument is (something a
friend of mine is going through right now).

Meanwhile, both Instagram and PayPal continue to allow you to use small claims
court to file smaller issues. With PayPal, as they are in Delaware, that is
for claims up to $15k, which is more than most individuals keep in their
PayPal accounts, and for Instagram (in California) that is $7.5k (although I'm
not certain what to compare this against, as I'm not certain what people would
ask for when they sue).

Additionally, it actually offers you protections: in both the PayPal and
Instagram versions of the clause, they are subject to the same arbitration
requirements that you are; the alternative is that they can just decide to
start a complex legal issue with you, causing all of the aforementioned costs
and complications, even if they doubt they'll be able to win (but, of course,
do think they could convince the judge to not throw it out of court; although
even asking the judge to do that might be costly for you).

 _(edit)_ Woah... except that Instagram actually has exceptions to the
arbitration clause, which give them some things they can still sue you over
(such as API misuse and network intrusion). (I am fairly confident the PayPal
one did not; I had a lawyer review it, and that did not come up, and I
actually read that one thoroughly.) That is _really lame_. :( That said,
issues involving your IP (including trademarks and copyrights, such as on your
photos) are not subject to this clause either. _(/edit)_

The downside people often cite is an inability to participate in class-action
lawsuits, but individual players in such deals really don't get anything out
of it: the main reason you should then care is if you feel the need to make a
philosophical point that class actions should happen because they are a way to
keep large entities with distributed customers in check; to note: I totally
appreciate that stance.

That is important enough that I will repeat it: I totally understand that
someone would then decide that they don't care about the earlier stated
benefits (which, to be clear, after my comments on this related to PayPal, I
ended up seeking real legal advice on from my corporate lawyer, and he
actually came up with those same reasons) and thereby would decide to opt out
anyway. However, a lot of people seem to have knee-jerk reactions to the
"arbitration" part, and that can be a benefit.

(The downsides were that it might take a few more days if you are trying to
get injunctive relief--such as forcing PayPal to immediately reactivate your
account so you can continue your business _ASAP_ while you resolve the issue--
and that you would probably not be able to appeal the decision if you didn't
like the outcome.)

(I will then say that the result, in my situation for the PayPal arbitration
clause, ended up being a semi-tentative "ok, let's opt out"; however, it
should be noted that I move millions of dollars through my account annually,
have a business model where I'm forced to keep many hundreds of thousands of
dollars in my account at almost all times, and at this time do not have an
alternative way to cheaply and automatically pay international vendors small
quantities of money, so I'm overly reliant on them.)

~~~
throwaway2048
The one key point you miss is it is the companies that insert mandatory
arbitration clauses that get to pick and choose arbitrators. Why should an
arbitrator rule against the company that is employing them, especially as it
virtually ensures the company will not do so in the future?

Arbitration is really only fair and effective between equal peers that can
choose to split the costs of the arbitration, and agree upon an arbitrator
together.

In cases of arbitration between a large entity and a single small customer,
the large entity wins virtually every single time. The top 10 arbitration
firms in the USA only rule in the favor of the consumer/employee 1.6% of the
time [1]

There's not a single health plan available in many states that does not
require agreeing to binding arbitration for coverage. None of them allow you
to opt out, even if you're willing to pay more. Sign away your right to sue,
or no coverage for you. Consider that under health care reform, one is
required to purchase one of these plans. There are dozens of industries that
are like this, where it is virtually impossible to receive a service or a good
of that class without agreeing to mandatory binding arbitration, such as
residential ISPs.

Add into the fact there is almost no way to appeal decisions, make no mistake,
Instagram is not doing this for your benefit.

The term "kangaroo court" comes to mind.

[1] [http://consumerist.com/2007/07/26/support-the-arbitration-
fa...](http://consumerist.com/2007/07/26/support-the-arbitration-fairness-
act/)

~~~
saurik
Health care plans supposedly tend to hire physician-specific arbitrators under
the idea "we need domain experts, or this turns into an anti-medical-
establishment 'kangaroo court'", something they are afraid of when using a
real court, as a jury of random people or even a judge with no knowledge of
what is reasonable or not" can be painful.

That said, PayPal and Instagram both choose AAA (American Association of
Arbiters), which honestly seems to be sufficiently large as to not be
concerned about bothering anyone. FWIW, my lawyer seemed to believe they would
be fair if I ever needed to arbitrate with PayPal: them being PayPal-biased
was not a concern.

As for the low rate... I would have expected that... wouldn't you have? With
an arbitration clause in place that allows you to initiate _and complete_ a
complaint from your home over the phone, one would expect to suddenly get many
more complaints than requiring users to actually sue you. Most users really do
have ludicrous expectations or misunderstandings, and probably go to
arbitration over tons of things that have nothing at all to do with the
business they think they are bothered with.

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courtneypowell
UPDATE: Fill out this form and PublikDemand will complete the Instagram
Arbitration Clause Opt-Out procedure for you.
[https://docs.google.com/spreadsheet/viewform?formkey=dEl5UEJ...](https://docs.google.com/spreadsheet/viewform?formkey=dEl5UEJraHFpellYTFd2QlVhbmFGVUE6MQ)

~~~
anti-pattern
Nice! Thanks so much for doing this.

~~~
courtneypowell
No problem, glad to see people taking advantage of it!

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antonej
This is a cool service, although I have to say I'd never use a website or app
(especially a free one) if going into it I thought I'd ever have to sue them
for anything. Litigation is a time-sucking expensive PITA. This ain't exactly
like a doctor's arbitration waiver where you might be signing away the right
to sue for millions if they remove the wrong kidney. :P

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courtneypowell
In other news... today the first user files class lawsuit against Instagram.

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devbin
The easiest way to opting out of the clause is by closing one's account at
Instagram.

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suckaplease
Thanks for doing this. We should identify the other companies that have an
opt-out clause. I hate the fact that we have to sign our rights away just to
use the best tools that are out there.

What happened to the open-web??

~~~
Karunamon
Well, to be fair, Instagram stopped being the best tool the moment they proved
they can't keep their lawyers on a leash ;)

(Or went evil, YMMV)

