eBay’s Sneaky Attack on Consumer Rights

When was the last time you read a software licensing agreement or a user agreement for a Web site or service?

If you’re like most people the answer is “never.” But sometimes that fine print contains something serious. Case in point: eBay’s new user agreement, an “underhanded” attempt to pull the rug out from under consumer lawsuits, says Public Citizen, a consumer rights organization.

I’m not one of those people who thinks that every little issue should be resolved with a lawsuit, but there are times when faced with unusually poor service or an invasion of privacy consumers have little choice. And because most of us can’t afford the enormous expense of a lawsuit against a company with very deep pockets, class action lawsuits are often the best way to get results.  

That’s exactly what eBay wants to stop. The new user agreement forces users to give up their right to go to court and prevents people from banding together in class actions, Public Citizen President Robert Weissman said in a letter sent to the eBay last week.

Most eBay users, he says, “accept the take-it-or-leave-it contract language without reviewing it, and most don’t understand that the forced arbitration clause means they will be shut out of court if they are harmed by company misconduct, particularly when large numbers of users each suffer small-dollar losses.”

Tellingly, the only way people can opt out of eBay’s new forced arbitration clause is by signing and sending a letter by traditional snail-mail – “a strange requirement for a company whose entire business platform is online,” the letter said.

 “To put it charitably, eBay’s requirement that opt-outs be submitted through traditional mail raises questions about the sincerity of its commitment to permitting users to protect themselves,” says Weissman.

eBay’s answer? “The arbitration provision encourages swift and reasonable resolution as opposed to litigation that can be protracted, expensive and often dissatisfying to customers,” a spokeswoman said. “We believe this approach will benefit both eBay Inc. and our customers.”

eBay’s action is part of a nasty, anti-consumer trend that was validated by the Supreme Court last year when it ruled that companies may include forced arbitration clauses in user agreements.

AT&T took advantage of that when a customer who had an unlimited wireless data plan complained that his connection was throttled, or slowed down, because he was allegedly downloading too much data. In the past, the outcome probably would have been a large class-action suit, but since that’s forbidden by the user agreement, AT&T got off the hook with a payment of $850.

Public Citizen is launching a petition drive to inform users of the new terms of service language as well as gather their support against it. As part of this launch, Public Citizen will help facilitate the opt-out process by providing a form that can be easily filled out online and then printed for sending. 

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