ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Thursday, January 4, 2024

TikTok Joins the Exodus from Mandatory Arbitration

Nancy-kimWay back in 2020, Nancy Kim (left) alerted us to the sea-change already begun in the world of Terms of Service (ToS).  As Nancy reported, both Door Dash and Uber were facing thousands of arbitration claims.  Under their ToS, which provided for mandatory arbitration, the companies were obligated to pay $11 million and $18 million respectively.  Welcome to the world of mass arbitration!  A year later, Nancy posted about Amazon's decision to remove mandatory arbitration from its terms of service.

Now, as Sapna Maheshwari reports in The New York Times, TikTok has joined the party, in a really charmless manner.  It has replaced arbitration with the requirement that claims be filed in one of two California courts, and it has shortened the statute of limitations to one year from the alleged harm.  It is not clear whether TikTok can make its new terms stick.  One problem is that minors make up a huge proportion of TikTok's Screenshot 2024-01-04 at 7.29.46 AMusers, and it is not clear how TikTok could make its terms stick against people under the age of 18.  Friend of the blog Omri Ben-Shahar is quoted in the article expressing skepticism that courts would enforce significant changes to ToS posted in an e-mail or some other electronic communications.  Given the requirement that claims be made exclusively in California courts, I would think the unconscionability doctrine might also come into play.

For those interested in learning more about mass arbitration.  Georgetown Law's Maria Glover (right) is the expert.  You can find her big article on subject on the Stanford Law Review's website.  A follow-up article is available on the Washington University Law Review Website.

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