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Facebook Dumps Binding Mandatory Arbitration


As noted in a prior post, Facebook has been considering revisions to its terms of use in response to widespread criticism in the blogosphere. Facebook has now posted a proposed “Statement of Rights and Responsibilities” for its users to review. Instead of an arbitration clause, the agreement now states:

You will resolve any claim, cause of action or dispute (“claim”) you have with us arising out of or relating to this Statement or Facebook in a state or federal court located in Santa Clara County. The laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions. You agree to submit to the personal jurisdiction of the courts located in Santa Clara County, California for the purpose of litigating all such claims.

There are still grounds to complain about requiring users to submit to jurisdiction in California, but Facebook deserves credit for doing away with binding mandatory arbitration. Hopefully other companies will learn a lesson from Facebook and realize that consumers don’t appreciate being required to give up all their rights.

Cross posted from the Consumer Law & Policy Blog.