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Spotify Fine Print Chips Away Consumer Rights

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Spotify, the popular online music streaming service, has introduced a new provision to its terms and conditions that further strips its users of their Seventh Amendment right to trial by jury. Buried in the fine print of the “terms and conditions of use” you agree to when signing up for Spotify is a “forced arbitration” clause.Forced arbitration is a form of dispute resolution in which a user waives their right to sue, to participate in a class action, or to appeal the decision of an arbitrator, as a mandatory condition for using a given product or service.  If Spotify cheats a customer or breaks the law, that customer cannot go to court and must instead have their dispute settled by a private arbitrator that is picked by Spotify.

The inclusion of forced arbitration clauses into contracts and terms of agreement has become an increasingly common practice by companies such as Netflix, Amazon, and AT&T.  Forced arbitration clauses are being used in more and more contracts for employment, insurance, car loans, credit cards, investment accounts, and so forth.

Most consumers have no idea that they’ve agreed to forced arbitration in their contracts.  It’s also worth noting that the vast majority of companies refuse to sign contracts with other businesses that include arbitration clauses like the ones they force on their customers.

Spotify recently added a new secrecy provision to its forced arbitration clause in its terms of use.  It reads:

“All documents and information disclosed in the course of the arbitration shall be kept strictly confidential by the recipient and shall not be used by the recipient for any purpose other than for purposes of the arbitration or the enforcement of arbitrator’s decision and award and shall not be disclosed except in confidence to persons who have a need to know for such purposes or as required by applicable law. Except as required to enforce the arbitrator’s decision and award, neither you nor Spotify shall make any public announcement or public comment or originate any publicity concerning the arbitration, including, but not limited to, the fact that the parties are in dispute, the existence of the arbitration, or any decision or award of the arbitrator.”

To summarize, this new provision bans Spotify’s customers from telling other people if they have a legal dispute with the company, or even talking about “the existence of the arbitration.” Furthermore, even if a consumer won their legal dispute in arbitration,  (which is unlikely given that Spotify effectively gets to choose the arbitrator), no one outside the case would ever be allowed to know.

Spotify’s most recent move bolsters the one-sidedness of the arbitration process, and it actively seeks to suffocate information consumers reasonably ought to have access to.  At present, companies have rigged the system against the average consumer according to Sun Tzu’s famous maxim: “Every battle is won before it’s ever fought.”  Should Spotify’s new secrecy provision stand, it could pave the way for other companies to include similar clauses in their arbitration agreements.

If you think consumers deserve a fair shot against companies when they cheat or break the law, you should let them know by signing this petition to remove forced arbitration clauses.

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