How to Opt-Out of Discord's Forced Arbitration Clause

Brett Abraham -

Discord is failing to protect your data and is using forced arbitration to ensure that they can’t get in trouble for it.

Discord recently updated their Terms of Service to include a deadline for opting out of their forced arbitration clause: May 15th, 2024. 

The forced arbitration clause requires all U.S. residents using Discord to settle disputes through arbitration rather than in a court of law, effectively waiving your right to sue or participate in class-action lawsuits. By agreeing to these terms, you are automatically consenting to arbitration, which typically favors companies over individuals.

Essentially, it’s a way for companies to bypass your consent for arbitration, which is supposed to be voluntary. If you want to retain your right to take legal action, you must opt-out of this clause by May 15th, 2024.

If you already know all about forced arbitration clauses and just want to get to how to opt out, skip here.

What is a Forced Arbitration Clause?

A forced arbitration clause strips you of your right to sue a company or participate in a class-action lawsuit. It forces any and all disputes you might have with them into arbitration and locks you out of civil court.

Arbitration is an alternative to civil court. It cannot be used in lieu of criminal court. Instead of a judge, an arbitrator hears your case. They make a binding and enforceable decision. In most cases, their decision is final with little option for appeal.

Voluntary arbitration is fast, private, enforceable, and can be cheaper than going to court. It can be beneficial if both parties would prefer to avoid court.

However, forced arbitration is not about your preference. A forced arbitration clause mandates that you use arbitration to settle any dispute. You cannot settle that dispute through the court of law.

A forced arbitration clause is an attempt to deprive you of your right to access the public court system to solve a dispute.

Forced Arbitration Clauses Protect Companies, Not You

If you've used Discord, you've likely already agreed to their terms of service. As we all like to joke, no one ever reads these. However, they can be very important, like in this case.

You're probably unlikely to sue Discord directly. But this clause also means that if there were a class action lawsuit against Discord, you couldn't participate.

Class action lawsuits often arise in response to negligence, misleading marketing, or other actions (or inactions) that might cause damage to a group of people.

Discord Knows a Class-Action Lawsuit Is Coming

If they’re smart, Discord is probably expecting a class-action lawsuit to come their way in the next few years. 

On April 17th, 2024, 404 Media released a (paywalled) report detailing the online service Spy Pet, which scrapes information from Discord messages and servers. It then sells that data for as low as $5 to anyone willing to pay. (Free summary of the report from Engadget).

This is a clear breach in Discord’s security. While Spy Pet shouldn’t be doing this, Discord should definitely be protecting users’ data from breaches like this.

Since Discord has failed to protect user data, they’re protecting themselves from a class-action lawsuit using the forced arbitration clause.

Class-Action Lawsuits Encourage Companies to Protect Your Data Better

The data we keep with companies and the way they protect it has come under scrutiny over the last few years. 

We’ve all heard about high-profile breaches, like when Cambridge Analytica stole and sold data on at least 50 million Facebook profiles. 

But there have also been large leaks and breaches that haven’t hit the front-page. Just a few months ago, in December 2023, Real Estate Wealth Network leaked over 1.5 billion records in one of the largest data leaks in history.

I don't know what you do on Discord and that's the point.

Because of the nature of the digital world, that data often feels intangible. We have little understanding of what data these companies actually have and what value it provides. Can you name all the types of data Google has on you and what they do with it?

I don't know what you do on Discord and that's the point. We keep things private from each other and, explicitly or not, trust these companies to handle our private data with care.

Discord is failing to protect our private data, and they don't want to get sued for it.

Companies Love Forced Arbitration (And Why You Should Hate It)

There are a bunch of reasons why a company would prefer to go the route of arbitration over going to civil court (arbitration can’t be used for criminal cases).

Arbitrators Don’t Need to Take the Law Into Account

While judges are required to base their decisions on the law and legal precedent, arbitrators aren't. As long as the arbitrator’s ruling doesn’t violate the general law of contracts, an arbitrator’s ruling will stand in court.

There are no set procedures for arbitration; it varies based on the arbitrator or the firm.

You don’t know what rules you’ll be forced to follow until an arbitrator is chosen.

Many firms have rules that you can read through on their website. For example, the rules for the firm JAMS is nearly 10,000 words of difficult to read legalese. Contrast the lengthy rules of JAMS with the comparably brief 1,300 word rules of the Massachusetts Dispute Resolution Services (MDRS).

I’m not saying that the length of the rules necessarily dictates quality, but even at just a glance you can tell these rules are wildly different.

The point is this: you don’t know what rules you’ll be forced to follow until an arbitrator is chosen. You can’t expect that legal precedent will be taken into account. And you can trust that the companies are relying on that.

Companies Will Hire Arbitrators Again; Customers Won't

According to the New York Times, arbitrators commonly consider the companies their clients. This means favorable results for the company will likely get them hired again.

This might not be an explicit "We won't hire you if you don't go our way!" But it will very likely bias the arbitrator to the company, even if only subconsciously. This is their livelihood, and they need to arbitrate to make money. If there's a chance this company could come back, they'd likely want it.

In one case, the [arbitrator and corporate lawyer] had played basketball together the night before.

The NYT reported that in many cases, the (supposedly neutral) arbitrators had very chummy relationships with corporate lawyers. In one case, they had played basketball together the night before. During a break in the proceedings in another, the arbitrator went out to lunch with the corporate lawyer.

While not all arbitrators are so blatant about their relationships with corporations, many still consider themselves tied to them. The NYT interviewed over 3 dozen arbitrators that said they felt beholden to companies: "Beneath every decision, the arbitrators said, was the threat of losing business."

Arbitration Appeals Are Extremely Unlikely

If you go to court and the result is complete hogwash, you are given the opportunity to appeal.

This appeal allows a higher court to review the case, which can correct errors made by the initial judge. It also ensures that the law was applied correctly (and legal precedent was taken into account!). The appeals process provides a second chance for a fair outcome.

There is no guaranteed appeals process with arbitration. Some have them, some don't. MDRS does not have an appeals process and explicitly states so in their arbitration rules: "The decision of the arbitrator(s) shall be final and binding and not subject to appeal."

JAMS Has a (Limited) Appeals Process

The aforementioned firm JAMS does have an appeals process and even kind of brags about it: “JAMS has offered its optional appellate arbitration procedure for more than 10 years.” As an ideal, this appeal is nice.

However, they neglect to mention a key aspect of their appeals process on that page. In the very last rule of their arbitration rules, "Optional Arbitration Appeal Procedure", they include the following line: "All Parties must agree in writing for such procedure to be effective."

Functionally, this means that if one party doesn't want to go to appeals you can't. If the company was happy with their result, they likely wouldn’t agree to any appeals.

Even if you do get an appeal, there is still a sizable amount of power in the arbitrator’s hands.

In the case of JAMS, they suggest a panel of people to review the appeal. If the two parties don't agree on the participants of the panel within 7 days, then JAMS will make a final decision. If you don’t like the panel (perhaps because the panel has a conflict of interest), JAMS can ignore that.

At the end of the day, even if the arbitrator has an appeals process, it isn't designed to protect you.

How to Opt-Out

If you want to opt-out of Discord's forced arbitration clause, I've done what I can to make it nice and simple.

The National Consumer Law Center (NCLC) created a general template for opting out of forced arbitration clauses. I took that template and made it specific to Discord. Just fill in your full name and email address. Your username isn’t required. 

Once you send it, make sure to save a copy of it for your records. Don't trust them to save it for you!

The Template

To: arbitration-opt-out@discord.com

Subject: Opt-out of arbitration clause in agreement dated March 15, 2024

Dear Sir or Madam,

I am writing to opt out of the arbitration clause in my agreement with Discord dated March 15, 2024 for the use of Discord's online communication services and related products.

If you have any questions, you may reach me at [YOUR EMAIL ADDRESS].

Yours very truly,

[YOUR FULL NAME]

Other Resources on Forced Arbitration Clauses

In case this wasn't clear, I am NOT a lawyer. This is not legal advice and all this research was done in the course of a few hours. If you are concerned about arbitration or forced arbitration clauses, consider consulting a lawyer.

There are many companies out there that use arbitration. It's become very popular over the last few decades. If you're interested in learning more, here's some more resources (many of which I used for research).

If you liked this, consider subscribing to my newsletter. I only email you when I post a new article. I swear I try to do things that are more interesting than scouring terms of service! For example, a few months ago I tried a modern-day Blackberry to see if it will get me to stop spending so much time on YouTube Shorts.