Dropbox Amends its Terms of Service to Add Mandatory Binding Arbitration (Also, No More Class Actions)

dropbox-middle-finger

Here is the new provision in the new terms of service:

We Both Agree To Arbitrate. You and Dropbox agree to resolve any claims relating to these Terms or the Services through final and binding arbitration, except as set forth under Exceptions to Agreement to Arbitrate below.

From now on, you’ll be using the American Arbitration Association if you have a dispute with Dropbox. Oh, and no more class actions, either:

No Class Actions. You may only resolve disputes with us on an individual basis, and may not bring a claim as a plaintiff or a class member in a class, consolidated, or representative action. Class arbitrations, class actions, private attorney general actions, and consolidation with other arbitrations aren’t allowed.

Presumably, this would include things like a disagreement over whether Dropbox should have given up your files to spy agencies or law enforcement without a fight.

Don’t worry, though, you can opt out — but only until April 23rd. (It doesn’t look like the opt-out applies to the class-action waiver. You’re just SOL for that.)

  • Garrett LaBorde

    Thanks Sam! I just finished reviewing my email notice of amended Terms of Service from Dropbox. I immediately went to Google to answer this question: Notwithstanding their reference to the “recently launched [but entirely aspirational] Government Data Request Principles”, what is our binding TOS that governs their response to Governmental Data Requests? Have you run across any changes there yet? Best, Garrett

  • Van Davis

    “…except as set forth under Exceptions to Agreement to Arbitrate below.”

    Out of curiosity, and to get a full sense of impact, what were these exceptions? Do they protect individuals at all?

    I plan on going to look for myself; but it would be easier for someone reading this to discern how big a problem this is or is not, with a full context to judge by.

  • AssHat900

    https://mega.co.nz/ 50 gig, free and encrypted.

  • EG

    Dear Dropbox,

    I want to let you know about some upcoming updates to our agreement as it relates to your Terms of Service. These updates will go into effect on March 24, 2014.

    You can get more details by spending your valuable time combing through various posts I have put around the internet (I’m really counting on the fact that you won’t actually do that), but here’s a quick overview:

    * I’m making some changes to the arbitration clause. Arbitration is a lopsided system that favors repeat players who get sued a lot (e.g., banks, credit card companies, cable companies, cell phone companies). Arbitration firms know where their bread gets buttered and are thus less likely to side with a weaker consumer. Discovery in arbitration is typically extremely limited, allowing corporations to avoid disclosing those pesky smoking gun documents. And wouldn’t you know it, damage awards in arbitration are statistically far less than those awarded in ordinary litigation.

    * To account for these discrepancies and ensure quick and efficient resolution of disputes, you agree that any dispute arising between Dropbox and me shall be resolved through binding arbitration administered by my friend Dave. All decisions by Dave shall be final and binding and you further agree to waive any and all defenses or appeals of Dave’s decisions, including but not limited to those found in 9 U.S.C. s . 10. All gateway issues, including but not limited to challenges to arbitrability, shall be resolved by Dave, not a court.

    *Dropbox shall be responsible for paying all expenses associated with resolution of this dispute, including my attorneys’ fees and costs, regardless of outcome. Since I will really want to win, I will be hiring the most expensive lawyers I can find. That shouldn’t dissuade Dropbox from challenging me though. Dave charges $400 per hour for his time, plus various administrative fees–admittedly more than the $250 filing fee in most courts, but worth every penny.

    *Arbitration proceedings shall occur at Dave’s house or other mutually agreeable location.

    By opening this email, which may or may not have been caught by your spam filter, you agree to the terms above. If you don’t want to arbitrate, just let me know by April 23rd. An arbitrary date? Sure. But I’ve got my fingers crossed that you don’t pay much attention to emails like this and will forget about it within seconds of reading it.

    Thanks!

  • Chody

    Could someone explain this in simpler terms, what are the changes being made?

    • http://samglover.net/ Sam Glover

      Unless you opt out, you cannot sue Dropbox in court. Instead, you have to go to arbitration. Arbitration on its own is not necessarily horrible. But forcing every dispute into arbitration, where the arbitrators are mostly paid by the corporation, is generally regarded as anti-consumer.

      Forcing you to waive class actions means that consumers will have no recourse as a group against Dropbox. Dropbox obviously likes this because, given the relatively low fees it charges, individual actions are not likely to be financially viable. Class actions are probably the only way consumers would be able to go after Dropbox.

  • Melvin Albritton

    I do not believe this is a big deal. Nearly every website you visit and software you use contains an Arbitration Clause in their terms of use. It’s standard.

    • http://samglover.net/ Sam Glover

      Standard ? good.