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Pokémon Go Arbitration Clause

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Pokémon Go certainly has been generating a lot of interest recently. However, the excitement is largely about the game itself, with many players unknowingly skipping over a surreptitious arbitration clause contained in the game’s terms and conditions. Niantic’s terms of service, among other provisions, contains the following arbitration clause:

 ARBITRATION NOTICE: EXCEPT IF YOU OPT OUT AND EXCEPT FOR CERTAIN TYPES OF DISPUTES DESCRIBED IN THE “AGREEMENT TO ARBITRATE” SECTION BELOW, YOU AGREE THAT DISPUTES  BETWEEN YOU AND NIANTIC WILL BE RESOLVED BY BINDING, INDIVIDUAL ARBITRATION, AND  YOU ARE WAIVING YOUR RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS ACTION OR REPRESENTATIVE PROCEEDING.

Sure, the terms of the arbitration clause may never come to fruition. But in the case of something like an app-wide data breach, users bound by the terms and conditions will see themselves forced to arbitrate their loss, without the option of a class action to mitigate costs.

What does being bound by arbitration clause really mean?

Binding arbitration means your grievance will be constrained to a private dispute resolution process outside of court. Many arbitration clauses, including the one at issue, allow the defendant to pick the arbitrator from a certain agency. Here, Niantic is able to pick an arbitrator from the American Arbitration Association (AAA), whose future business with the company will likely depend on their judgment. Additional negatives include the rising costs of arbitration and the very limited ability to appeal an arbitrator’s judgment to a court.

How will waiving the right to a class action affect me?

In AT&T Mobility LLC v. Concepcion, the Supreme Court decided that class-action waivers in arbitration agreements would be largely enforceable, despite the fact that many consumer’s small-dollar grievances would slip through the legal system. Thus, despite the importance of class actions in employment and consumer contexts, the symbolic David versus Goliath battle is all but over in the context of arbitration. Thus, despite the amount of losses that may be caused by the company, each consumer would have to shoulder those costs individually in arbitrating their grievance.

Is there any way to get out of these constraints?

Luckily, the terms of service also includes an option to opt out of the terms and conditions. A user can opt out by sending an email to termsofservice@nianticlabs.com with “Arbitration Opt-out Notice” in the subject line and a clear message indicating that you are opting out of the arbitration clause in the Pokémon Go terms of service. Since many users only downloaded the application recently, there is still time to avoid the contract’s effects.

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