- A Litigator's Perspective On the Evolving Role of Economics In Antitrust Litigation
- An Economic Perspective On the Usefulness of the Consumer Welfare Standard As a Guiding Framework For Antitrust Policy
- Chair's Column
- "COMPETITION POLICY IN ITS BROADEST SENSE": CAN ANTITRUST ENFORCEMENT BE A TOOL TO COMBAT SYSTEMIC RACISM?
- Editor's Notes
- Jeld-wen: Opening the Door To Private Merger Challenges?
- On Being a Transwoman Lawyer...
- Patents and Antitrust In the Pharmaceuticals Industry
- Ten Years Post-therasense: Closing the Gap Between Walker Process Fraud and Inequitable Conduct
- The Consumer-welfare Standard Should Cease To Be the North Star of Antitrust
- The Evolution of Antitrust Arbitration
- Fairness Requires the Elimination of Forced Arbitration
FAIRNESS REQUIRES THE ELIMINATION OF FORCED ARBITRATION
By Robert S. Kitchenoff, Heidi M. Silton, Pamela Gilbert, Nigar A. Shaikh, and Geoffrey H. Kozen1
Mandatory arbitration and its kissing cousin, the class action waiver, are virtually ubiquitous in contracts of adhesion. The dominant party uses its superior market power to impose these provisions on its powerless counterparty to the transaction. Arbitration is routinely forced upon small businesses, consumers, investors, franchisees, software users, and even employees in situations where the power imbalance makes specious any claim that arbitration was bargained for or voluntary. It was not always so.
Arbitration began as a means for "merchants . . . to resolve disputes of fact, not law, under the customs of their industries, where the parties possessed roughly equivalent bargaining power."2 But courts, whether jealously guarding their jurisdiction or for other parochial reasons, often refused to enforce these consensual arbitration agreements.3
Enter the Federal Arbitration Act ( "FAA"),4 signed into law by President Calvin Coolidge in February 1925.5 The FAA provides that "an agreement in writing to submit to arbitration . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."6 The FAA’s legislative history shows that the Act was not intended to make new law but rather to ensure that arbitration agreements in commercial and admiralty contracts were considered on the same footing as other contracts.7 For decades the FAA was uncontroversial, applying primarily to commercial contracts between companies engaged in business across state lines.8
Over time the use of arbitration provisions changed. They went from being a shield, used to resolve factual disputes employing knowledgeable intermediaries in an industry,
to a sword used to protect one of the parties from, and to bar the other party from using, the dispute resolution tools of the judicial system.
Similarly, the settled law also began to change. In the 1980s the Supreme Court first announced that the FAA evidenced "a national policy favoring arbitration."9 Under the banner of this newly recognized policy, the Court moved aggressively to permit statutory rights claims to be determined through arbitration while simultaneously limiting the discretion of both federal and state courts to find arbitration clauses unenforceable. This trend accelerated in the ensuing decades as the Supreme Court has consistently refused to recognize any circumstances where a forced arbitration clause does not preclude litigation despite the savings clause in Section 2.10
I. BIG TECH’S RISE TO FORCED ARBITRATION
No industry has profited more from the Supreme Court’s warping of the FAA into its modern form than Big Tech. Across the board, tech companies use their enormous market power to require all those who do business with them, whether employees, customers, vendors or, in Amazon’s case, marketplace sellers, to waive all right to their day in court as a condition of platform access.
Google, Facebook, and Amazon are among the largest and most profitable companies the world has ever seen. What is more, each is firmly ensconced in a platform market and armed with massive collections of consumer data, rendering competition by upstarts close to impossible. Without meaningful competition and with high barriers to entry, the leaders of Big Tech possess and exert monopoly power in the markets in which they participate.
One way that Big Tech exerts—and abuses—that monopoly power is through forcing customers, employees, and others to agree to pre-dispute arbitration provisions, including class-action waivers. And no member of Big Tech has leaned into that abusive tactic more than Amazon.
At the heart of Amazon’s business is the Amazon Marketplace, which operates to connect third-party sellers with Amazon’s customers.11 The arrangement gives sellers access to millions of Amazon buyers, and buyers access to millions of Amazon sellers all in one location.12 Amazon has few, if any, meaningful competitors.
With such an overwhelming majority of the online marketplace market, third-party sellers have little choice and no viable alternative to signing up for the Amazon Marketplace to access those Amazon purchasers. By accepting the terms they are presented with, third-party sellers sign away their right to go to court and to pursue remedies collectively with others similarly harmed.
II. ARBITRATION ISN’T FAST, INEXPENSIVE, VOLUNTARY, OR BARGAINED FOR
At a recent House Judiciary Committee hearing in connection with its consideration of the Forced Arbitration Injustice Repeal ("FAIR") Act,13 Jacob Weiss, an Amazon Marketplace third-party seller testified:
There’s no way for an e-commerce company to be successful today without selling on Amazon’s marketplace – it simply has too much of the online retail market under its control. But before Amazon would let me sell anything on its marketplace, it forced me to sign what it calls a Business Seller Agreement. I had no ability to negotiate the terms of that agreement and I had no ability to sell on Amazon without signing that agreement. And as I just mentioned, you simply can’t survive in e-commerce without access to Amazon’s marketplace. Obviously, this left me, and thousands of others like me, with only one choice: to sign Amazon’s agreement.14
And critically, those terms require that any disputes between third-party sellers and Amazon be resolved through "binding arbitration . . . rather than in court."15 Further, the "seller agreement also forbids any class arbitration or class actions."16 Proponents of arbitration have long claimed that such clauses benefit both parties by reducing the cost and time required to resolve disputes.17 But Mr. Weiss’s testimony puts the lie to those platitudes.
Mr. Weiss offered eye-opening testimony describing in detail his two experiences arbitrating disputes with Amazon. Those experiences showcase how, far from speeding a resolution while conserving both parties’ resources, arbitration instead ensures that
justice is never achieved. In Mr. Weiss’s experience, "the process is slow, expensive, and financially infeasible for many claims."18
The first arbitration Mr. Weiss brought against Amazon was because "Amazon charged . . . more for shipping than my agreement with Amazon allowed."19 Amazon agreed to fix the problem going forward but refused to reimburse Mr. Weiss for substantial overcharges.20 Amazon pulled out all the stops to drive up the cost of the arbitration.21 The arbitration cost Mr. Weiss $50,000 in arbitration fees alone, in addition to the attorneys’ fees he paid.22 Even after Mr. Weiss prevailed, Amazon refused to pay the award until a court issued an order enforcing the arbitrator’s judgment, which again raised Mr. Weiss’s costs.23 In total, after the costs of arbitration and legal fees, Mr. Weiss recovered very little, despite Amazon’s wrongdoing.24 The second arbitration had been pending for 9 months at the time of Mr. Weiss’s testimony—hardly a quick and efficient resolution.25
Mr. Weiss’s experience is more emblematic than unique. Few actually believe that arbitration agreements and class action waivers are freely negotiated by the parties.26 Rather, they are imposed by dint of Big Tech’s market power. Nor can you just choose not to purchase or contract with a company that imposes arbitration on its customers. Like it or not, interacting with Big Tech companies is a necessity of modern life. Interested in having a cell phone? Every major carrier requires their customers to submit to individual arbitration.27 Interested in using social media to keep up with your friends and family? Instagram requires arbitration.28 Considering those realities, claiming that consumers can avoid arbitration by passing on a cell phone or a computer is really no answer at all.
Likewise, any claim that by agreeing to an arbitration provision not expressly permitting class arbitration means the consumer knowingly agreed to waive his or her right to proceed as a class is not a realistic statement of the consumer experience. Consumer products impose arbitration on consumers even when there are no contracts. Forced arbitration provisions are, for example, "buried deep in the warranties, user manuals,
It is no wonder, then, that both the House judiciary Subcommittee on Antitrust and the Senate judiciary Committee’s Antitrust Subcommittee, have recently recommended strengthening private enforcement by eliminating forced arbitration clauses and limits on class actions.32
III. FORCED ARBITRATION IS INIMICAL TO THE ENFORCEMENT OF THE ANTITRUST LAWS
Forced arbitration is neither neutral nor benign. Although its proponents portray arbitration as a cheaper, quicker alternative to litigation that benefits all parties,33 the evidence shows otherwise. Forced arbitration fails to provide a meaningful forum to resolve disputes in almost all cases. It reinforces the dominant party’s market power, suppresses valid claims and competition, and extinguishes the rights of small companies, consumers, and workers. Prohibiting class actions, including class actions in arbitration, compounds the disadvantage to consumers and small businesses, particularly in situations where damages may be small, or claims may be complex and costly to pursue.34 In other words, the market power that lets companies insist on individual arbitration serves to insulate them from laws designed to curb that very same market power.
More specifically, forced arbitration clauses keep claims and rulings away from the public eye; they overwhelmingly favor corporations through limitations on discovery, the arbitrator selection process favors corporations who are familiar with receptive arbitrators, and arbitration is often prohibitively expensive for smaller players. Nowhere is that truer than in antitrust actions. As justice Kagan explained in her scorching dissent in Italian Colors:
[An arbitration clause] imposes a variety of procedural bars that . . . make pursuit of the antitrust claim a fool’s errand . . . even if [a party]
has in fact violated the law. The monopolist gets to use its monopoly power to insist on a contract effectively depriving its victims of all legal recourse . . . . [As such,] a company could use its monopoly power to protect its monopoly power, by coercing agreement to contractual terms eliminating its antitrust liability.35
Or, as Jacob Weiss testified: "[t]he system is completely rigged against us and other small to mid-sized business owners."36
One of the most significant harms of forced arbitration is that these private proceedings undermine stare decisis and the development of legal precedents. Furthermore, arbitration allows violations to continue without public detection, which makes it incredibly difficult to remedy wrongdoings on a broad scale and decreases the deterrent effect of the antitrust laws. In her 2019 testimony before the Senate Judiciary Committee, Benjamin N. Cardozo School of Law Professor Myriam Gilles stated:
[M]andatory, pre-dispute arbitration provisions pose a more enduring threat to our polity because these provisions force disputes into hermetically-sealed, secret proceedings — denying the American public the transparency, openness and accountability that are central to our civil justice system.37
Because most arbitration decisions are not recorded or made public, they do not create legal precedent that other entities can rely on to put them on notice of unlawful conduct and to guide their compliance with antitrust laws.38 As Professor Gilles also notes, these closed-door proceedings create "grave inefficiencies" since the applicability of arbitrators’
rulings is limited to the claimant in the arbitration, and thus arbitrators cannot order relief on a systemic scale.39
Arbitration also benefits antitrust violators like Big Tech by severely limiting the scope of discovery. For example, "arbitration does not generally use the full panoply of depositions, interrogatories, document requests, and motions to compel that are common in federal court."40 Additionally, third-party discovery is limited or non-existent.41 Finally, the protections in place under the federal rules to protect against spoliation and perjury do not generally exist in arbitrations, potentially encouraging discovery abuse.42 And though limited discovery does reduce costs, it presents unique challenges to successful antitrust litigation where plaintiffs generally need more discovery to prove their claims, as ‘"much of the information needed to prove that a monopolist is monopolizing is under the control of the monopolist.’"43 Discovery requirements are also more onerous in antitrust cases because claimants must provide detailed evidence showing market definition.44 Without sufficient discovery, many meritorious antitrust claims are doomed to fail.45
Though Big Tech and other companies have tried to justify these provisions as being faster and cheaper for claimants,46 the ultimate results of these provisions clearly benefit corporate defendants, as they prevent parties from bringing claims and result in awards of less money than in litigation. As Deepak Gupta and Lina Khan note: "By both suppressing claims and yielding outcomes less favorable to workers and consumers, arbitration most likely transfers wealth upwards."47 And these provisions work. Data submitted by Facebook, Google, Amazon, and Apple in 2019 in response to questions from the House Antitrust Subcommittee show that very few employees, customers, and contractors file
arbitration claims against any of the giants.48 Between January 1, 2014, and September 1, 2019, for example, Google contractors initiated only three arbitration claims, and Google employees only initiated 11 arbitration claims.49
Furthermore, those brave enough to litigate against Big Tech must deal with the repeat player effect and the likelihood that they will be awarded much less for the trouble they went through to submit a claim.50 Several recent investigations show that arbitrators were more likely to rule in favor of corporate defendants in order to get repeat business, and that arbitrators were more likely to award significantly less money to claimants than juries in state and federal trials.51 For example, a 2015 Economic Policy report showed the results from a 2011 study comparing the outcomes of 1,213 mandatory arbitration cases administered by the American Arbitration Association with the outcomes of employment discrimination cases in federal courts and non-civil rights employment cases in state courts over a five-year period.52 The study found that, on average, plaintiffs’ overall economic outcomes were 6.1 times better in federal court than in mandatory arbitration ($143,497 versus $23,548) and 13.9 times better in state court than in mandatory arbitration ($328,008 versus $23,548).53 Because of this repeat player effect and the likelihood claimants will lose or be awarded much smaller damages, many also encounter difficulties trying to retain lawyers willing to represent them.54 As David Gottlieb, employment attorney in New York who represents workers in arbitration notes: "What’s really happening is that our judicial system is getting privatized . . . in a way that really favors one side, the employer."55
Other common arbitration clauses in contracts that favor Big Tech are those that mandate a venue that is geographically convenient for the corporate defendant; severely limit the ability to appeal; shift arbitration costs to the worker, consumer, or small business; limit the time within which plaintiffs must pursue arbitration despite longer statutes of
limitations; and prohibit arbitrators from awarding certain kinds of relief, including treble damages or injunctive relief.56 The inability to award treble damages is especially critical because treble damages serve to deter future antitrust violations.57
IV. CLASS ACTIONS ARE NECESSARY FOR ANTITRUST ENFORCEMENT
Additionally, a growing number of contracts now also contain class action waivers, which have been upheld as enforceable by the Supreme Court, even where the cost makes bringing the claim too prohibitively expensive for any rational actor to pursue.58 Indeed, a study of the top 100 Fortune 500 companies of 2018 found that 81 of those companies used consumer arbitration agreements, and of those 81 companies with consumer arbitration agreements, 78 companies had class action waivers in their arbitration agreements.59 As Professor Gilles notes "[u]nder these class-banning arbitration clauses, any claimant must bear 100% of all the costs of proceeding in arbitration by herself; her claim cannot be joined with those of any other arbitral claimant as a way of distributing costs and risks."60
Congress created the class action vehicle "to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor."61 Additionally, the aggregation of claims into a sizeable judgment deters misconduct and incentivizes companies to right wrongdoings quickly.62 Consumers and small businesses with antitrust claims are particularly in need of a claims aggregation process. As Harvard Law Professor Einer Elhauge notes: "Now that the courts have interpreted federal antitrust law to require an economically rigorous showing on market definition, power, and effects, antitrust claims require an economics expert, precluding individual low-stakes suits and thus requiring some sort of class procedure to share the costs."63 Furthermore, Congress created antitrust laws with the idea that private antitrust litigation would "provide a
significant supplement to the limited resources available to the Department of justice for enforcing the antitrust laws and deterring violations."64
By barring class actions, it becomes too costly and therefore irrational for individuals to pursue separate claims, "functionally immuniz[ing]" antitrust violators from private suit.65 As Jacob Weiss notes:
It simply makes no sense for a business to risk tens of thousands of dollars in arbitration, legal, and expert fees to recover a few thousand dollars. But as a business owner, recovering a few thousand dollars can sometimes be the difference between making payroll or having to shut down. In sum, Amazon’s class action waiver effectively insulates Amazon from ever even having to face justice.66
V. THE EVOLUTION OF SUPREME COURT’S FAA PRECEDENT
To say that current Supreme Court precedent favors forced arbitration and class-action arbitration waivers would be an understatement. But that was not always the case. For the first sixty years of its existence, the Federal Arbitration Act was uncontroversial, and had little to no application to consumer disputes.67 That began to change in 1984 with the Supreme Court’s decision in Southland Corp. v. Keating, which for the first time recognized a theretofore unknown "national policy favoring arbitration" such that the FAA "withdrew the power of the states to require a judicial forum for the resolution of claims."68 The Court, for the first time, held that the FAA applied in state courts, and superseded state laws that effectively compelled resolution of contractual disputes through the courts.69
The Supreme Court has subsequently reaffirmed and extended its Southland holding.70 It can now be said that the FAA preempts any state law or judicial interpretation that
prevents mandatory arbitration of any individual type of dispute.71 It has also ruled that the FAA prevents states from singling out arbitration provisions for "suspect status," such as requiring them to appear on the first page of an agreement, or in bold.72
The Court’s more recent decisions have centered on the FAA’s "savings clause," which states that an arbitration agreement may be invalidated "upon such grounds as exist at law or in equity for the revocation of any contract."73 In other words, on its face the FAA allows courts to hold arbitration agreements unenforceable based on factors that would invalidate the contract as a whole—including unconscionability.
Over the past decade, however, the Supreme Court has systematically excised that provision from the statute Congress passed, ruling that no state-law rules may be enforced in the context of arbitration if they stand as an obstacle of the Court’s "national policy favoring arbitration."74 While the interpretation of contracts is generally a matter of state not federal law, the Supreme Court has held state law unconscionability analysis, for example, to be preempted by the FAA. State law opinions, such as Discover Bank v. Superior Court,75 and Thibodeau v. Comcast Corp.,76 analyzing arbitration agreements and class action waiver provisions in contracts of adhesion under general state law contract provisions are no longer feasible.
In AT&T Mobility LLC v. Concepcion, the Defendant was alleged to have charged consumers sales tax for phones it had advertised as free.77 Although the arbitration provision in each consumer’s contract contained a class-action waiver and requirement to arbitrate individually, the consumers argued that California law clearly provided that class-action waivers are unconscionable when contained in certain types of consumer contracts.78 The Ninth Circuit agreed with the consumers, holding that California law did not conflict with the FAA because any consumer class waiver was considered unconscionable, whether the contract contained an arbitration clause or not.79
The Supreme Court disagreed. While it paid lip service to the FAA’s saving clause, it found that even arbitration-neutral unconscionability analysis was preempted by the FAA when it imposed restrictions on arbitration such as requiring class procedures.80 It ultimately concluded that California law was preempted because it interfered with
the Supreme Court’s slant on the FAA’s objective: creating and promoting a bare-bones dispute resolution process.81
The Supreme Court doubled down on the Concepcion ruling two years later in American Express Company v. Italian Colors Restaurant.82 There, merchants who accepted American Express challenged American Express’s class arbitration waiver on the grounds that it fundamentally conflicted with the policies underlying the federal antitrust laws.83 The merchants argued that American Express used its market power both to require acceptance of individual arbitration and to charge anti-competitive fees.84 The merchants cogently argued that the expert costs associated with proving antitrust violations—which often run into the hundreds of thousands or millions of dollars—would render individual arbitration cost-prohibitive in every case, eliminating the deterrence function Congress wrote into the Clayton Act.85
The Supreme Court again elected to squelch consumer rights in favor of arbitration. Though it allowed that the FAA could be overridden by a "contrary congressional command," the majority held that neither the Sherman Act nor the Clayton Act contained an explicit section precluding waiver of class action procedures in arbitration.86 To add insult to injury, the Court also opined that necessarily prohibitive costs of pursuing individual arbitration should not be viewed as preventing the effective vindication of the merchants’ rights under the antitrust laws because the merchants retained "the right to pursue" a remedy.87
VI. WHAT TO DO
Given the Supreme Court’s recent decisions, including most prominently Concepcion, and Italian Colors, the solution to the abuse of forced arbitration and class action waivers will not lie in the Courts. It has indeed been suggested that the Supreme Court’s interpretation of the FAA in cases such as Concepcion may well be the death of class actions.88 But the sky is not necessarily falling. Big Tech and Consumer Products Companies are highly sensitive to economic pressure and negative publicity. Congress will need to act, and consumers, consumer advocates, academicians, and lawyers will need to organize, lobby, and use social media to sensitize Congress and corporations to the detriments of forced arbitration.
While corporations do not have a soul or a moral compass, they are quite sensitive to public opinion and, it turns out, to the cost of arbitration. Despite having touted its cost
effectiveness for both parties to disputes, Amazon removed the arbitration provisions from retail customer contracts in May 2021 when lawyers representing aggrieved consumers organized more than 75,000 separate, individual arbitrations against Amazon.89 Deepak Gupta, who represented AT&T’s customers in Concepcion dubbed this the "cynicism of forced arbitration."90 Gupta stated: "It was never about making it easier for customers to resolve disputes — it was about killing claims . . . Once Amazon saw it would have to face an avalanche of claims, it decided to walk away." Class actions might be more beneficial than arbitrations after all.
Similarly, Google workers banded together to stage a 20,000 person walk out in December 2018 in protest of the mandatory arbitration provision in Google’s employment agreements for employee sexual harassment claims.91 Google agreed to change the practice and, after further pressure, agreed to abandon forced arbitration altogether in employee disputes.92 Facebook followed Google’s lead and removed forced arbitration provisions from its employment contracts.93 Mass actions may not be the solution in all situations but they have demonstrated the hypocrisy of the benefits of forced, pre-dispute arbitration and the vulnerability of Big Tech to having its bluff called.94
Antitrust law is having a moment, and opposition to forced arbitration and class action waivers is gaining momentum.95 If this trend continues it will be at the expense of Big Tech, which finds itself a target of both Democrats and Republicans, albeit for different reasons not relevant here. Six new antitrust bills specifically targeting the practices of Big Tech have been passed by the House of Representatives Judiciary Committee.96 If enacted by the full Congress, these six bipartisan bills would prohibit Big Tech from: preferring
their own products over those of competitors who use their platforms;97 holding more than a quarter of a competitor’s stock or profits, taking over competitors;98 creating its own products to disadvantage competitors using its platform;99 and seeking to shift State Antitrust proceedings to friendlier courts.100 The bills would also increase merger filing fees to provide the DOJ and FTC with more resources to enforce antitrust laws.101 They would further allow users to take some or all of their data if they leave the platform.102 If passed, these business model disrupting bills would fundamentally and significantly change the competitive landscape for Big Tech, and might even require the breakup of one or more of these companies. Importantly, the American Choice and Innovation Online Act and the Platform Competition and Opportunity Act provide for private rights of action, including treble damages, costs, and attorneys’ fees, and simple interest on actual damages in certain instances.
In addition, the Senate is considering the Competition and Antitrust Law Enforcement Reform Act, introduced by Senator Klobuchar, which would modernize and beef up antitrust regulation, enforcement, and penalties.103 Senator Klobuchar also recently introduced her own Big Tech reform measure — the Health Misinformation Act of 2021 — which would amend Section 230 of the Communications Act to "strip online platforms such as Facebook Inc. and Twitter Inc. of their liability protections if their technologies spread misinformation related to public-health emergencies, such as the Covid-19 pandemic."104
While these landmark antitrust bills are important, ending forced arbitration and class action waivers in all antitrust, consumer, employment, and civil rights disputes105 is still the most important way to level the playing field for consumers, entrepreneurs, small business, employees, and victims of civil rights violations. The FAIR Act reflects years
of work by groups such as COSAL to bring this issue to the fore.106 The Act passed the House in 2019 but could not muster the necessary support in the Senate. It is likely that the Act will, once again, pass the House. Passage in the Senate remains the challenge, and Big Tech and other large corporations will do their best to protect their turf.
There is much work yet to be done but the tide just may be turning.
1. Robert S. Kitchenoff is the managing partner of Weinstein Kitchenoff & Asher LLC, located in Philadelphia, PA. He is the Immediate Past President of COSAL — The Committee to Support the Antitrust Laws. Heidi Silton is a partner at Lockridge Grindal Nauen in Minneapolis, MN. She is the 2021 President of COSAL. Pamela Gilbert is a named partner in Cuneo Gilbert & LaDuca, LLP in Washington, DC. She serves as Legal Representative and Executive Director of COSAL. Nigar A. Shaikh is an associate in the San Francisco office of Lieff Cabraser Heimann & Bernstein, LLP. Geoffrey H. Kozen is an associate in the Minneapolis office of Robins Kaplan LLP.
2. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 362 (2011) (Breyer, J., dissenting).
3. Mark A. Lemley & Christopher R. Leslie, Antitrust Arbitration and Merger Approval, 110 NW. UNIV. L. REV. 1, 6 (2015) (citing Donald I. Baker & Mark R. Stabile, Arbitration of Antitrust Claims: Opportunities and Hazards for Corporate Counsel, 48 BUS. L. 395, 401 (1993)); see also David L. Noll, Arbitration Conflicts, 103 MINN. L. REV. 665, 675 (2018).
4. Pub. L. No. 68-401, 43 Stat. 883 (1925) (codified at 9 U.S.C. §§ 1-307 (2012)).
5. JON O. SHIMABUKURO & JENNIFER A. STAMAN, CONG. RSCH. SERV., R44960, MANDATORY ARBITRATION AND THE FEDERAL ARBITRATION ACT 2 (2017).
6. 9 U.S.C. § 2.
7. Concepcion, 563 U.S. at 359-60.
8. See Defenses Using Contract Terms & the "Savings" Clause, INST. L. & POL’Y, http://employeerightsadvocacy.org/our-work/ending-forced-arbitration-in-the-workplace/justice-denied/defenses-using-contract-terms-the-savings-clause/ (last visited July 7, 2021).
9. Southland Corp. v. Keating, 465 U.S. 1, 10 (1984).
10. See, e.g., Dr’s. Assocs., Inc. v. Casarotto, 517 U.S. 681 (1996) (applying FAA to preempt state court law requiring first page notice of an arbitration clause in a franchise agreement); Stolt-Nielsen S.A. v. Animal Feeds Int’l Corp., 559 U.S. 662 (2010) (prohibiting class arbitration unless specifically provided for in arbitration agreement); Concepcion, 563 U.S. at 352 (California law on contract unconscionability preempted despite the fact that it applies not only to arbitration contracts but to all contracts); Am. Express Co. v. Italian Colors Rest., 570 U.S. 228 (2013) (upholding individual arbitration of antitrust claims over objection that individual arbitration makes vindication of a statutory right impossible); Epic Sys. Corp. v. Lewis, 138 S.Ct. 1612 (2018) (same under the Fair Labor Standards Act).
11. See Reach Millions of Business Customers, AMAZON BUS., https://sell.amazon.com/programs/amazon-business.html (last visited July 7, 2021).
12. See id.
13. H.R.963, 117th Cong. (2021-2022). The Bill has also been introduced in the Senate as S.505, and has been referred to the Senate Judiciary Committee.
14. Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights, Before the H. Subcomm. on Antitrust, Com. & Admin. L. and H. Comm. on the Judiciary, 117th Cong. 1 (2021) (statement of Jacob Weis, President & CEO, OJ Commerce LLC), https://docs.house.gov/meetings/JU/JU05/20210211/111171/HHRG-117-JU05-Wstate-WeissJ-20210211.pdf.
15. See Amazon Services Business Solutions Agreement, AMAZON SELLER CENT., https://sellercentral.amazon.com/gp/help/external/G1791?language=en_US (last visited June 9, 2021).
16. Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights, Before the H. Subcomm. on Antitrust, Com. & Admin. L. and H. Comm. on the Judiciary, supra note 14, at 1.
17. See, e.g., Letter from Neil L. Bradley, Exec. Vice President, Chief Pol’y Officer, & Head of Strategic Advoc., U.S. Chamber of Com., to the Members of the U.S. Cong., (Mar. 8, 2021), https://www.uschamber.com/letters-congress/us-chamber-letter-the-forced-arbitration-injustice-repeal-fair-act.
18. Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights, Before the H. Subcomm. on Antitrust, Com. & Admin. L. and H. Comm. on the Judiciary, supra note 14, at 1.
19. Id. at 3.
26. See, e.g., Katherine V.W. Stone & Alexander J.S. Colvin, The Arbitration Epidemic (Dec. 7, 2015), https://www.epi.org/publication/the-arbitration-epidemic/ ("The employee or consumer has no real choice or ability to negotiate the terms of the arbitration clause.").
27. See, e.g., My Verizon Wireless Customer Agreement, VERIZON (June 9, 2021), https://www.verizon.com/legal/notices/customer-agreement/.
29. See Scott Medintz, Forced Arbitration: A Clause for Concern, CONSUMER REPS., Jan. 30, 2020, https://www.consumerreports.org/mandatory-binding-arbitration/forced-arbitration-clause-for-concern/.
30. See Debra Cassens Weiss, Chief Justice Roberts Admits He Doesn’t Read the Computer Fine Print, ABA J. (Oct. 20, 2010), https://www.abajournal.com/news/article/chief_justice_roberts_admits_he_doesnt_read_the_computer_fine_print.
31. See generally Jerett Yan, A Lunatic’s Guide to Suing for $30: Class Action Arbitration, The Federal Arbitration Act and Unconscionability After AT&T v. Concepcion, 32 BERKELEY J. EMP. & LAB. L. 551 (2011).
32. See Press Release, Jerrold Nadler, Statement for Subcommittee Hearing on "Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights" (Feb. 11, 2021), https://judiciary.house.gov/news/documentsingle.aspx?DocumentID=4368; Press Release, Richard Blumenthal, Blumenthal Leads Introduction of Legislation Opening the Courthouse Doors to Consumers, Workers (Mar. 1, 2021), https://www.blumenthal.senate.gov/newsroom/press/release/blumenthal-leads-introduction-of-legislation-opening-the-courthouse-doors-to-consumers-workers.
33. See, e.g., Michael A. Helfand, Arbitration’s Counter-Narrative: The Religious Arbitration Paradigm, 124 YALE L.J. 2994, 3008 n.49 (2015).
34. See, e.g., Medintz, supra note 29 (discussing how the "potential financial recovery of an individual claim" disincentivizes pursuing "small-dollar claims").
35. Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 240-41 (2013) (Kagan, J., dissenting).
36. Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights, Before the H. Subcomm. on Antitrust, Com. & Admin. L. and H. Comm. on the Judiciary, supra note 14, at 1.
37. (Forced) Arbitration in America: Suppressing Claims Undermining Corporate Accountability, and Perpetuating Injustice Before the S. Judiciary Com., 116th Cong. 3 (statement of Myriam Gilles, Professor of Law, Benjamin N. Cardozo School of Law) (2019), https://www.judiciary.senate.gov/imo/media/doc/Gilles%20Testimony.pdf.
38. See, e.g., Myriam Gilles, The Day Doctrine Died: Private Arbitration and the End of Law, 2016 UNIV. ILL. L. REV. 371, 415-16 (2016) (discussing how if landmark antitrust cases such as Twombly and Credit Suisse had been deliberated in private arbitration instead of the judicial process, the impact on Sherman Act jurisprudence would have been immense); Lillian T. Howan, The Prospective Effect of Arbitration, 7 INDUS. RELS. L.J. 60, 62 (1985) ("In contrast to the judicial doctrine of stare decisis, an arbitrator’s interpretation of the contractual relation is not technically binding on a future arbitrator. Instead, the arbitrator must exercise independent and impartial judgment in each case."); see also Jean R. Sternlight, Is the U.S. Out on a Limb? Comparing the U.S. Approach to Mandatory Consumer and Employment Arbitration to That of the Rest of the World, 56 UNIV. MIA. L. REV. 831, 835 (2002) (noting that a hallmark of mandatory, binding arbitration is the "eliminati[on] [of] the claimant’s right to present claims to a judge or jury . . . preventing litigants from setting public precedents"); Cynthia Estlund, The Black Hole of Mandatory Arbitration, 96 N.C. L. REV. 679, 681 (2018) ("The relative invisibility of particular disputes and their outcomes in arbitration thus undermines the regulatory function of private-enforcement actions, which serve not only as a dispute resolution mechanism but also as an ex post alternative or supplement to ex ante prescriptive rules of conduct.").
39. (Forced) Arbitration in America: Suppressing Claims Undermining Corporate Accountability, and Perpetuating Injustice Before the S. Judiciary Com., supra note 37, at 3.
40. Lemley & Leslie, supra note 3 at 14; see also Thomas Campbell, Roxane Busey, & Peter Koch, Arbitrating Antitrust Claims—The Road Less Traveled, 19 ANTITRUST 8, (Fall 2004)("The procedural formalities of litigation—depositions, interrogatories, document requests, objections to discovery, motions to compel, motions to dismiss, third-party discovery, motions for summary judgment—are generally disfavored. Their use, if allowed, is much less extensive.").
41. Lemley & Leslie, supra note 3 at 13 ("[T]hird-party discovery may be difficult or impossible depending on the circumstances."); see also Donald I. Baker & Mark R. Stabile, Arbitration of Antitrust Claims: Opportunities and Hazards for Corporate Counsel, 48 Bus. Law. 395, 410 (1993).
42. Lemley & Leslie, supra note 3 at 16 (citing Kristen M. Blankley, Taming the Wild West of Arbitration Ethics, 60 UNIV. KAN. L. REV. 925, 928-29 (2012)).
43. Id. at 15 (quoting Margaret L. Moses, Statutory Misconstruction: How the Supreme Court Created a Federal Arbitration Law Never Enacted by Congress, 34 FLA. STATE UNIV. L. REV. 99, 140 (2006)).
44. See, e.g., Einer Elhauge, How Italian Colors Guts Private Antitrust Enforcement by Replacing It with Ineffective Forms of Arbitration, 38 FORDHAM INT’L L.J. 771, 771-72 (2015).
45. See Baker & Stabile, supra note 41 at 425 ("Adequate discovery often is key to the resolution of antitrust disputes.").
46. See, e.g., David Lazarus, Column: AT&T’s New Arbitration Clause Isn’t Doing You Any Favors, L.A. TIMES (Mar. 19, 2021), https://www.latimes.com/business/story/2021-03-19/column-arbitration-clauses (detailing a call with an AT&T spokesperson who described arbitration as "faster [and] less expensive").
47. Deepak Gupta & Lina Khan, Arbitration as Wealth Transfer, 35 YALE L. & POL’Y REV. 499, 503 (2017).
48. See David Dayden, Tech Companies’ Big Reveal: Hardly Anyone Files Arbitration Claims, AM. PROSPECT (Nov. 26, 2019), https://prospect.org/power/tech-companies-hardly-anyone-files-arbitration-claims/.
49. See id.
50. See, e.g., Alexia Fernández Campbell & Alvin Chang, There’s a Good Chance You’ve Waived the Right to Sue Your Boss, Vox, Sept. 7, 2018, https://www.vox.com/2018/8/1/16992362/sexual-harassment-mandatory-arbitration (discussing how "arbitrators can be biased toward employers who repeatedly pick them to handle their cases").
51. See, e.g., Jessica Silver-Greenberg & Michael Corkery, In Arbitration, a ‘Privatization of the Justice System,’ N.Y. Times (Nov. 1, 2015), https://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html; Alexander J.S. Colvin, The Growing Use of Mandatory Arbitration, ECON. POL’Y INST. (Apr. 6, 2018), https://www.epi.org/publication/the-growing-use-of-mandatory-arbitration-access-to-the-courts-is-now-barred-for-more-than-60-million-american-workers/; Lisa B. Bingham, Employment Arbitration: The Repeat Player Effect, 1 EMP. RTS. & EMP. POL’Y J. 189, 199 (1997); Mark Gough, A Tale of Two Forums: Employment Discrimination Outcomes in Arbitration and Litigation, 74 ILR REV. 875 (2020) (finding that rates of employee wins in arbitration are lower than wins in state and federal court).
52. See Stone & Colvin, supra note 26.
53. See id.
54. (Forced) Arbitration in America: Suppressing Claims Undermining Corporate Accountability, and Perpetuating Injustice Before the S. Judiciary Com., supra note 37, at 5 (citing AT&T Mobility LLC v. Concepcion, 563, U.S. 333 (2011) (Breyer, J. dissenting) ("What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?")).
55. See Campbell & Chang, supra note 50 (internal quotations omitted).
56. (Forced) Arbitration in America: Suppressing Claims Undermining Corporate Accountability, and Perpetuating Injustice Before the S. Judiciary Com., supra note 37 at 11 (internal citations omitted).
57. Deborah A. Garza, et al., Report and Recommendations 246, ANTITRUST MODERNIZATION COM. (2007), https://govinfo.library.unt.edu/amc/report_recommendation/amc_final_report.pdf ("Treble damages compensate for the reality that some anticompetitive conduct is likely to evade detection and challenge. If a company realizes that its anticompetitive conduct has only a 50 percent chance of being detected, and if its liability were limited to single damages, it would be more likely to engage in that conduct because the reward exceeds the risk.").
58. See, e.g., Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 236 (2013) ("[T]he fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.") (emphasis in original).
59. Imre Stephen Szalai, The Prevalence of Consumer Arbitration Agreements by America’s Top Companies, 52 U.C. DAVIS L. REV. ONLINE 233, 234 (2019).
60. (Forced) Arbitration in America: Suppressing Claims Undermining Corporate Accountability, and Perpetuating Injustice Before the S. Judiciary Com., supra note 37 at 5.
61. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)).
62. See Medintz, supra note 29.
63. Elhauge, supra note 44 at 773.
64. AAI Transition Report on Competition Policy to the 44th President of the United States 222, AM. ANTITRUST INST. (Oct. 6, 2008), https://www.antitrustinstitute.org/work-product/aai-transition-report-on-competition-policy-to-the-44th-president-of-the-united-states/ (citing Reiterv. Sonotone Corp., 442 U.S. 330, 344 (1979); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 635 (1985) ("The treble-damages provision wielded by the private litigant is a chief tool in the antitrust enforcement scheme, posing a crucial deterrent to potential violators."); Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 151 (1987) (Clayton Act "bring[s] to bear the pressure of ‘private attorneys general’ on a serious national problem for which public prosecutorial resources are deemed inadequate").
65. Lemley & Leslie, supra note 3 at 38 (citing Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 245 (2013) (Kagan, J., dissenting) ("No rational actor would bring a claim worth tens of thousands of dollars if doing so meant incurring costs in the hundreds of thousands.")).
66. Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights, Before the H. Subcomm. on Antitrust, Com. & Admin. L. and H. Comm. on the Judiciary, supra note 14 at 2.
67. Lemley & Leslie, supra note 3 at 6 ("Although Congress passed the FAA in 1925, federal courts did not meaningfully address the arbitrability of antitrust claims until the 1960s.").
68. 465 U.S. 1, 10 (1984).
70. Noll, supra note 3 at 679-82 (discussing the "arbitration revolution" that arose out of and expanded the dicta favoring arbitration agreements in Southland).
71. State Courts and the Federalization of Arbitration Law, 134 HARV. L. REV. 1184, 1185 (2021) ("[T]he modern Supreme Court has interpreted § 2 of the [FAA] as a substantive commitment to a federal arbitration policy that preempts state laws contrary on their face or in application.").
72. Dr’s. Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)
73. 9 U.S.C. § 2 (2012).
74. Southland Corp. v. Keating, 465 U.S. 1, 10 (1984).
75. 36 Cal.4th 148, 163-173 ((2005).
76. 912 A.2d 874, 887 (Penn. 2006).
77. 563 U.S. 333, 399 (2011).
79. Laster v. AT&T Mobility LLC, 584 F.3d 849, 856 (9th Cir. 2009).
80. Concepcion, 563 U.S. at 344.
82. 570 U.S. 228 (2013).
83. Id. at 233.
84. Id. at 245 (Kagan, J., dissenting).
85. Id. at 231.
86. Id. at 233-34. This is, of course, absurd given that the Sherman Act was passed in 1890 and the Clayton Act in 1914 – 35 and 10 years before the FAA. Nor would one expect either statute to make a reference to class actions which, in their modern form, didn’t exist until the 1966 Amendments to the Federal Rules of Civil Procedure.
87. Id. at 235 (emphasis in original).
88. See generally BRIAN FITZPATRICK, THE CONSERVATIVE CASE FOR CLASS ACTIONS 5 (2019).
89. See Amanda Robert, Amazon Drops Arbitration Requirement After Facing Over 75,000 Demands, ABA J. (June 2, 2021), https://www.abajournal.com/news/article/amazon-drops-arbitration-requirement-after-facing-75000-demands. It is also worth noting that Amazon replaced the consumer arbitration provision with a forum-selection provision that requires bench-trial litigation in Amazon’s home of King County, Washington. See Conditions of Use, AMAZON, https://www.amazon.com/gp/help/customer/display.html?nodeId=GLSBYFE9MGKKQXXM (last visited June 9, 2021).
90. Michael Corkery, Amazon Ends Use of Arbitration for Customer Disputes, N.Y. TIMES, July 22, 2021, https://www.nytimes.com/2021/07/22/business/amazon-arbitration-customer-disputes.html.
91. See Daisuke Wakabayashi, Erin Griffith, Amie Tsang, & Kate Conger, Google Walkout: Employees state Protest Over Handling of Sexual Harassment, N.Y. TIMES, Nov. 1, 2018, https://www.nytimes.com/2018/11/01/technology/google-walkout-sexual-harassment.html.
92. Daisuke Wakabayashi, Google Ends Forced Arbitration for All Employee Disputes, The N.Y. TIMES, Feb. 21, 2019, https://www.nytimes.com/2019/02/21/technology/google-forced-arbitration.html.
93. See id.
94. The FAIR Act is clear that arbitration remains an option when, after a claim arises, both parties elect to arbitrate. It only prohibits pre-dispute mandatory arbitration where forcing arbitration on consumers, employees, small business, and others may serve to prevent claims from being brought. Thus, Section 5 of the Act states: "Nothing in this Act . . . shall be construed to prohibit the use of arbitration on a voluntary basis after the dispute arises."
95. For example, in addition to the FAIR Act, the Ending Forced Arbitration of Sexual Assault & Sexual Harassment Act has been introduced in both the Senate and the House and referred to their respective Judiciary Committees. Paige Smith, Lawmakers Crossing Aisle to End Harassment Claim Arbitration, BLOOMBERG LAW, July 14, 2021, https://news.bloomberglaw.com/daily-labor-report/lawmakers-push-to-end-forced-arbitration-of-harassment-claims.
96. See Cecilia Kang & David McCabe, House Lawmakers Are Considering 6 Bills Aimed at Big Tech, N.Y. TIMES, June 23, 2021, https://www.nytimes.com/2021/06/23/technology/big-tech-antitrust-bills.html.
97. The American Choice and Innovation Online Act, H.R. 3816 117th Cong. (2021), https://www.congress.gov/bill/117th-congress/house-bill/3816/text?r=43&s=1.
98. The Platform Competition and Opportunity Act of 2021, H.R.3826 117th Cong. (2021), https://www.congress.gov/bill/117th-congress/house-bill/3826/text?r=5&s=1.
99. The Ending Platform Monopolies Act, H.R.3825 117th Cong. (2021), https://www.congress.gov/bill/117th-congress/house-bill/3825/text.
100. The State Antitrust Enforcement Venue Act of 2021, H.R.3460 117th Cong. (2021), https://www.congress.gov/bill/117th-congress/house-bill/3460.
101. The Merger Filing Fee Modernization Act of 2021, H.R. 384, 117th Cong. (2021), https://www.congress.gov/bill/117th-congress/house-bill/3843/text. This bill has also been introduced in the Senate as S.228, sponsored by Senators Klobuchar and Grassley, https://www.congress.gov/bill/117th-congress/senate-bill/228/text.
102. The Augmenting Compatibility and Competition by Enabling Service Switching Act of 2021 (the "Access Act"), H.R. 3849 117th Cong. (2021), https://www.congress.gov/bill/117th-congress/house-bill/3849/text.
103. Press Release, Amy Klobuchar, Senator Klobuchar Introduces Sweeping Bill to Promote Competition and Improve Antitrust Enforcement (Feb. 4, 2021), https://www.klobuchar.senate.gov/public/index.cfm/2021/2/senator-klobuchar-introduces-sweeping-bill-to-promote-competition-and-improve-antitrust-enforcement.
104. Siobhan Hughes, Bill Would Strip Social Media of Protections for Health Misinformation, WALL ST. J., July 22, 2021, https://www.wsj.com/articles/bill-to-strip-social-media-of-protections-for-health-misinformation-11626976800.
105. See id.
106. See Statement, Heidi Silton, President of COSAL, The Committee to Support the Antitrust Laws Urges Congress to Pass the Forced Arbitration Injustice Repeal Act (FAIR Act) (Feb. 11, 2020), https://static1.squarespace.com/static/5ed9557b62edf55d38fcd5bf/t/60256319e3e03868421365d6/1613062939352/COSAL+Statement+in+Support+of+the+FAIR+Act.pdf.