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This article is written by Yukta Joshi pursuing Certificate Course in Arbitration: Strategy, Procedure and Drafting from LawSikho.

Introduction

Many of you might have purchased one or another Google Device and used its services and accessories but did you know that Google has a binding arbitration agreement that requires its customers to settle any disputes between them through arbitration only? Very little is known regarding this aspect of the Pixel series. You can opt-out of this binding agreement within a specified time after you purchase your Pixel device. Let us see what this agreement provides for and how one can opt-out of this agreement if one does not agree with its terms. Also, learn whether opting out is the right option for you and what will be the consequences once you do so.

What is an arbitration agreement?

An arbitration agreement is essentially an agreement between the parties to arbitrate their matter in case of disputes or differences between them. In other words, by drafting, including, and signing an arbitration agreement or arbitration clause within their contract, the parties consent that all or a particular kind of disputes relating to their contract will be resolved by arbitration. In their agreement, the parties specify certain particulars as to how they want to conduct the arbitration. For example, the rules and the law which will be followed and applied to resolve their matter, the number or name(s) of arbitrators who will preside over and privately adjudicate the matter, the place, and the language of arbitral proceedings, etc. Not only the arbitration agreement but also the award passed thereon is binding upon the parties to the dispute since they have consented to the same. In the agreement, the parties must expressly and clearly show their intention to refer their dispute to arbitration.

What is Google’s arbitration agreement?

Generally, big companies mention their arbitration or dispute resolution agreements in their privacy policies. Recently Google has updated its data and devices policy to include the binding arbitration terms to resolve any disputes with its customers through arbitration. It believes that it is in the interest of both the parties to resolve their disputes or differences most quickly and cost-effectively and that’s why arbitration is the preferred way. Recent Google’s Devices like Google Pixel 3, 3XL, 3a, 3a XL, Pixel 4, 4XL, 4a, Pixel 5, etc. come with an arbitration agreement and very little is known about this aspect of Pixel devices. In general, it provides that if any dispute arises that relates to the terms of the arbitration agreement, data advertising program agreement, repair-service program agreement, etc. between you and Google, both of you agree to resolve it through binding arbitration. 

By agreeing to the arbitration agreement at the time of your purchase of the device, you consent that if something goes wrong with the device in the future outside of its warranty, then the problem or dispute which may arise between the parties will be resolved by binding arbitration i.e., outside the courts by a neutral third party called as ‘arbitrator’. The terms of Google’s Binding Arbitration Agreement for its devices, related accessories, and related subscription services, apply only to the customers located in the United States. 

Main highlights of the terms of the agreement

  • Applicable law

The arbitration terms of Google’s Arbitration agreement are subjected to and governed by the Federal Arbitration Act (FAA).

  • Institution and rules

The American Arbitration Association (AAA) shall conduct and administer the arbitration proceedings following its Consumer Arbitration Rules. The AAA Rules and filing online forms are available at www.adr.org.

  • Scope

The scope of the arbitration agreement includes the following types of disputes. In other words, the disputes or subject matters that shall be arbitrable are:

  1. Any disputes regarding the design, performance, features, or functionality of your Google Device;
  2. Any disputes regarding your use of your Google Device;
  3. Any disputes regarding updates, modifications, or upgrades to your Google Device;
  4. Any disputes based on the Google Device warranty or based on device defects whether or not the Google Device is under warranty; 

The arbitration terms shall apply:

  1. Whether your dispute is with Google, its subsidiaries, affiliates or parent company, or any suppliers or service providers involved with the Google Device, and their officers, directors, employees, agents, and successors; and
  2. Regardless of the legal theory on which you base your claim (such as breach of warranty, breach of contract, negligence, etc.).

For disputes or claims relating to your Google Device, these arbitration terms supersede any terms regarding dispute resolution in any other agreement between you and Google.

  • Process

The agreed procedure for conducting arbitration between you (customer) and Google is as follows:

  1. Written notice of the dispute to the other party by certified U.S. Mail or by Federal Express (or international equivalent) or, only if the other party hasn’t provided a current physical address, then by electronic mail. Google’s address for notice is:
  • Google LLC
  • Legal Department – Hardware Arbitration 
  • c/o Corporation Service Company
  • 2710 Gateway Oaks Drive, Suite 150N
  • Sacramento, CA 95833

b. The notice shall include details of the party making the notice, details of the google device, a description of the nature and basis of claims regarding the device, the desired result/relief, etc.

c. If the dispute is not resolved mutually by the parties within 60 days after receiving the said notice, either party may initiate the arbitration proceeding by following the AAA Rules.  Unless otherwise agreed by parties, your demand for arbitration (as a customer) should be sent to Google’s address for notice and entitled as “Demand for Arbitration”, after which Google will send demands for arbitration to you at your e-mail address provided in the notice of the dispute.

  • Fees and location of the hearing

If you commence the arbitration, Google will pay you the filing fee, unless your claim is for more than $10,000, in which case the AAA Rules will determine who pays that fee. If your claim is for $10,000 or less, you may decide whether you want the arbitration to be conducted only based on documents or through a telephone hearing. Unless the parties agree otherwise, any arbitration hearing will take place (at your option) in Santa Clara County or the county (or parish) of your current address.

  • No class actions

These arbitration terms do not permit class actions. If you agree to these terms to the fullest extent legally permissible, you cannot bring class actions against Google. Even the arbitrator cannot consolidate claims into a class proceeding. However, either party may bring claims relating to the arbitration terms and/or Google device in their individual capacities.

arbitration

  • Enforceability

Except as provided in Section 6 above, if any provision of these Arbitration Terms is found unenforceable, that provision will be severed and the balance of these Arbitration Terms will remain in full force and effect. If for some reason the entirety of these Arbitration Terms is found to be unenforceable, then they won’t apply, and you and Google agree to resolve disputes in the state or federal courts in Santa Clara County, California.

  • Confidentiality

The parties agree to maintain either party’s trade secrets or proprietary business information as confidential and protect the confidentiality of any other information (such as private customer information) that is legally protected from disclosure. However, they may each disclose these matters, in confidence, to their respective accountants, auditors, and insurance providers.

  • 30-day return or opt-out period

The customer has a right to return his Google Device or opt-out of the arbitration terms if he disagrees with the arbitration terms within 30 days of his purchase. The agreement comes with the retail box of the Device. You may reject any changes made to these arbitration terms in the future by notifying Google via the process set out in section 4 above, within 30 days of the notification of change. But then that means that you are agreeing to accept the remaining terms and arbitrate any dispute that may arise between you both. If you have properly opted out of arbitration upon purchase, then there is no question or point of submitting a rejection of the future change.

How to opt-out of this binding agreement?

Once the customer has consented to and agreed upon the arbitration agreement for resolving any disputes relating to the purchased Google Device or accessories or services, at the time of purchase of the device, the customer enters into the binding arbitration agreement. In absence of any such previously agreed arbitration provision or agreement, the customer has an option to opt-out of this arbitration agreement or return the purchased Google Device within 30 days of activating his Device for the first time (unless a longer period is required by applicable law). The Device should be returned to the seller unused, with the original packaging, to receive a full refund. If the customer wishes to keep the Device but opt out of the Arbitration Terms under the said agreement, he must notify Google within 30 days of activating his Device for the first time by following the instructions given below. An opt-out notice does not revoke or otherwise affect any previous agreement between you and Google.

Ways or instructions to opt-out of your Google Devices’ arbitration agreement

    1. Visit Google’s opt-out page within 30 days of your purchase.
    2. Choose your device from the drop-down menu.
    3. Type the serial number of your device which you can find on the retail box or in case you don’t find it, you can check it on your phone by going to Settings > About Phone> Model & hardware.
    4. Enter the same email address which you used to sign in to your Google account on your Pixel Device.
    5. Click on the Submit button and you’re done!

Consequences and advantages of opting-out

The arbitration agreement of Google prevents class-action i.e., the customers cannot file a suit against Google in case of a dispute (except in certain cases) relating to the purchased Google Device, accessories, services. However, an individual claim can be brought in small claims court by either party in their capacities. Also, matters relating to intellectual property rights infringement claims can be resolved by the court having jurisdiction. If you, as the customer, encounter some issue(s) with your Device in the future under the warranty, then Google will replace it or rectify the issues as per the Google In-Store Repair Terms after you write to Google and make such a request. If Google determines that your Device is not covered by the manufacturer’s warranty following inspection, then additional charges not shown in the work authorization may apply.  The Device under these terms refers to your Pixel device that qualifies for the repair program and is identified on your work authorization. 

If you agree to these arbitration terms, in their entirety and sign the said arbitration agreement, then you shall be legally bound to resolve any kind of dispute with Google through arbitration only after a 60 days period for mutual discussion or negotiation has elapsed from the date of receipt of the arbitration notice.

If you don’t agree with these arbitration terms and don’t wish to arbitrate any future dispute with Google, then you can opt-out of this binding arbitration agreement. By opting out, you could bring a class action in the court in any future dispute. 

Advantages of opting out 

Generally, the big companies prefer arbitration because they often have an upper hand in these private forums and more chances of winning even before a neutral third-party arbitrator, as often arbitrators are far less likely than jurors to give million-dollar awards to customers or employees when they find a company at fault for breaking the law. Juries are considered more sympathetic to such claims. Further, arbitration is by nature a confidential process and allows a company to hide its misconduct to a certain extent. Courts rule based on the law. Arbitrators can rule based on “fairness” and other such things instead of the law itself allowing companies like Google to get away with more and victims like employees or customers to remain with less or nothing at all.

By opting out of this mandatory or binding arbitration agreement, you do not have to fear the unknowns of these private forums and can move to court in case you deem that proper. 

Conclusion 

Generally, binding arbitration is not a good idea for the consumer. Not being able to use the court system to get relief against companies when there’s a problem gives companies a lot of power, even with that third-party arbitrator. The good news is, you can opt out of Google’s binding arbitration agreement within a limited time. 

Big companies like Google often try to drag their customers, employees, and contractors into the binding arbitration agreements because of that dominance factor and greater chances of winning as compared to the public Courts. Recently, after a global protest by employees of Google on binding arbitration, Google has ended this mandate, while in the case of Google’s customers, it has given an option to legally opt-out of the arbitration agreement within 30 days of purchasing or activating their pixel devices. 

After opting out, you no longer will be bounded by and required to follow any arbitration agreement or any of its terms. If you reject a particular term therein and request to reject and opt-out from the same from Google, you will be impliedly deemed to have accepted the binding arbitration agreement. 

References


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