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Forced Arbitration Isn't 'Forced' Because No One Has To Buy Service, Says AT&T (arstechnica.com)

Posted by BeauHD on from the read-the-fine-print dept.

An anonymous reader quotes a report from Ars Technica: AT&T is denying that its contracts include "forced arbitration" clauses, even though customers must agree to the clauses in order to obtain Internet or TV service. "At the outset, no AT&T customer is ever 'forced' to agree to arbitration," AT&T Executive VP Tim McKone wrote in a letter to U.S. senators. "Customers accept their contracts with AT&T freely and voluntarily; no one 'forces' them to obtain AT&T wireless service, DirecTV programming, or other products and services." AT&T was responding to concerns raised by Sens. Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Patrick Leahy (D-Vt.), and Edward Markey (D-Mass.), who previously alleged that AT&T's use of forced arbitration clauses has helped the company charge higher prices than the ones it advertises to customers. While AT&T is correct that no one is forced to sign up for AT&T service, there are numerous areas of the country where AT&T is the only viable option for wired home Internet service. Even in wireless, where there's more competition, AT&T rivals Verizon and Sprint use mandatory arbitration clauses, so signing up with another carrier won't necessarily let customers avoid arbitration. One exception is T-Mobile, which offers a way to opt out of arbitration. The terms of service for AT&T Internet and DirecTV require customers to "agree to arbitrate all disputes and claims" against AT&T. Class actions and trials by jury are prohibited, although individual cases in small claims courts are allowed. AT&T doesn't offer any way to opt out of the arbitration/small claims provision, so the only other option is not buying service from AT&T.

6 of 342 comments (clear)

  1. No one is forced my ass by Anonymous Coward · · Score: 5, Informative

    In a lot of markets, AT&T is part of an oligopoly or even may have a monopoly. High speed internet is necessary for a lot of people, especially if they need it for their jobs or classes. When there are very limited options for service, AT&T and their competitors might all include forced arbitration clauses. Get rid of the monopolies and oligopolies, and perhaps AT&T might have a point. Right now, the statement sounds like something I'd say when I'm trolling. No one is forced my ass. Bring in more competition, then we'll talk.

    1. Re: No one is forced my ass by Anonymous Coward · · Score: 3, Informative

      But since most jobs require you to "go to our website to apply", not having internet drastically reduces your ability to provide for yourself. Yes, it's not a necessity in the same way electricity isn't a necessity, your life can continue on without it, but you will be at a disadvantage compared to everyone else.

    2. Re: No one is forced my ass by mysidia · · Score: 4, Informative

      having an internet connection is not a right.

      It is enough of a right that the supreme court ruled Social networking website bans for past sexual offenders unconstitutional.

  2. Re:quite peculiar by ewanm89 · · Score: 2, Informative

    Yes, even in the US this is absolutely true, also unilateral contracts (one where all terms are set by a single party like an eula or a conditions of sale contract) are seen very different from a bilateral contracts and do not have anywhere near the same enforcement value.

    The courts frequently strike down such arbitration clauses as such clauses are direct unilateral violation of rights in a given jurisdiction.

    IANAL

  3. Re:quite peculiar by DRJlaw · · Score: 5, Informative

    The courts frequently strike down such arbitration clauses as such clauses are direct unilateral violation of rights in a given jurisdiction.

    IANAL

    That's obvious, because you're wrong.

    The Federal government passed the Federal Arbitration Act, which authorizes such arbitration clauses, and there's a pesky thing in the Constitution called the Supremacy Clause. AT&T itself won a U.S. Supreme court case that said that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class-wide arbitration, on the basis of statutory interpretation, since nobody seriously questioned that wireless contracts were within the scope of the Interstate Commerce Clause.

    Specifically,

    Relying on the California Supreme Court's Discover Bank decision, [the Ninth Circuit Court of Appeals] found the arbitration provision unconscionable because it disallowed classwide proceedings. The Ninth Circuit agreed that the provision was unconscionable under California law and held that the Federal Arbitration Act (FAA), which makes arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract," 9 U. S. C. sec. 2, did not preempt its ruling.

    Held: Because it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," Hines v. Davidowitz, 312 U. S. 52, 67, California's Discover Bank rule is preempted by the FAA. Pp. 4-18.

    IAAL.

  4. Utility, not a luxury by Roger+W+Moore · · Score: 4, Informative

    having an internet connection is not a right. its a luxury good that you choose to buy or not.

    No, it is a utility just like gas, water and electricity. In theory, you can survive without all of these but you would be camping in your house and while an internet connection might be regarded as a luxury while camping it isn't really a luxury anymore for everyday life. In addition, the cost of duplicating the infrastructure to each house means that at a local level there is no real competition which is how capitalism keeps companies focused on providing the best service. Hence the utility market has to be heavily regulated otherwise companies can abuse their monopolistic power by putting unreasonable terms into their contracts leaving consumers with a choice between accepting them or house-camping.