The problem with arbitration is legal resource mismatch and sealed results. Each complainant would have to find, pay for and manage any suit or negotiation (bringing the likelihood of complaints escalating beyond the initial offer to near-zero). And even if a John Doe and his cousin-lawyer managed to dig up a smoking gun, no-one else would know about it. So each individual would go through the process ignorant of other results, while the Corporation builds experience and additional strategic advantage dealing with the situation over and over again.
If you approach class-action lawsuits from the standpoint of "what good comes of it for the individual" there's not a big change and I've heard that we could expect more people (who put up with the process) would be more likely to get some award and that such an award is likely to be higher than what they'd get from a class-action suit. [1]
But if you approach class-action lawsuits from the standpoint of "what punishment does the misbehaving corporation suffer", mandatory individual arbitration is a tragedy. [2] It's implausible for the legal investigation into the corporation to approach the same level and implausible for the net penalty to even remotely approach that of a class action suit. The corporation is already heavily favored in any legal battle and individual arbitration simply compounds that advantage. And PR damage done from having said bad behavior exposed to the market at large is no longer a concern. In short: the penalty for misbehavior is massively reduced.
As to "how do you know the end-user agreed to that": click-through EULAs have also been upheld by US courts for some time. Though I don't believe the SCOTUS has addressed them directly just yet.
[1] I've read that multiple studies have found arbitration as having a higher and more frequent payout rate for complainants than class action lawsuits. I won't vouch for that position, but I don't take issue with it, as those results are largely irrelevant from my viewpoint.
[2] Yes, there is a ton of progress that could be made on the question of how that penalty gets distributed. But I believe it's far more important to address that issue on its own than to effectively end class-action suits.
If you approach class-action lawsuits from the standpoint of "what good comes of it for the individual" there's not a big change and I've heard that we could expect more people (who put up with the process) would be more likely to get some award and that such an award is likely to be higher than what they'd get from a class-action suit. [1]
But if you approach class-action lawsuits from the standpoint of "what punishment does the misbehaving corporation suffer", mandatory individual arbitration is a tragedy. [2] It's implausible for the legal investigation into the corporation to approach the same level and implausible for the net penalty to even remotely approach that of a class action suit. The corporation is already heavily favored in any legal battle and individual arbitration simply compounds that advantage. And PR damage done from having said bad behavior exposed to the market at large is no longer a concern. In short: the penalty for misbehavior is massively reduced.
As to "how do you know the end-user agreed to that": click-through EULAs have also been upheld by US courts for some time. Though I don't believe the SCOTUS has addressed them directly just yet.
[1] I've read that multiple studies have found arbitration as having a higher and more frequent payout rate for complainants than class action lawsuits. I won't vouch for that position, but I don't take issue with it, as those results are largely irrelevant from my viewpoint.
[2] Yes, there is a ton of progress that could be made on the question of how that penalty gets distributed. But I believe it's far more important to address that issue on its own than to effectively end class-action suits.