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Category Archives: Class Actions
Will more giant online corporations follow suit like Instagram and take away class action remedies from their users? That seems to be the trend since Instagram merely followed the lead of other online companies. In the last couple of years, Sony, PayPal, Microsoft and Netflix have also banned class actions as a way of consumer redress. Instead, these corporations force consumers into arbitration whenever a dispute arises. We realize that arbitration is a useful and efficient form of dispute resolution in some cases. However, arbitration does not provide any form of injunctive relief – a way of stopping a company’s harmful practices. In the case of Instagram, its new policies allow it to use and profit from a user’s name and likeness without seeking permission or paying any compensation to the user. Only a court can grant injunctive relief, and arbitration clauses take away the consumers’ access to the courts….
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Why would Instagram want to insert a mandatory arbitration clause into its terms of service agreement, as we told you in our Monday blog? Because a U.S. Supreme Court decision says it can, among other reasons. In April 2011, in AT&T Mobility v. Concepcion, the Supreme Court said that the Federal Arbitration Act trumped state laws. Until Concepcion, states could require companies to allow class action lawsuits in their terms of service agreements. However, after Concepcion, more and more companies are taking advantage of the Federal Arbitration Act by removing consumers’ class action rights from their terms of service agreements. In addition, large online companies know that the majority of consumers will not bother to read the lengthy terms of service agreements when they open their accounts. Do you automatically scroll to the bottom of the agreement and click “agree” without reading the terms? That is what most people do…
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Northern California is the site of the class action lawsuit filed against Instagram stemming from its controversial updated terms of service. Industry insiders were saying a lawsuit like this was inevitable after Instagram said it has the right to sell a user’s Instagram photographs without permission from the user and without compensation to the user. If you are not familiar with Instagram, it is a photo app that allows you to manipulate smart phone pictures and upload them to your Instagram account. Facebook acquired Instagram earlier this year. Under its new terms of service, if you upload a picture of yourself wearing a pair of designer sunglasses, Instagram can sell that picture to the sunglass company without telling you or paying you. If you close your Instagram account, Instagram says it still owns all the photos that you uploaded, according to its new terms of service. To add insult to…
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