Introduction
In a move described by legal experts as “cynical” and “self-serving,” genetic testing company 23andMe is facing backlash for updating its terms of service just two days before disclosing a major data breach. The changes are seen as an attempt to make it harder for affected customers to pursue legal claims against the company. Experts argue that these changes are aimed at preventing customers from participating in mass arbitration, also known as arbitration swarms.
Key Takeaway
23andMe’s recent changes to its terms of service, following a major data breach, have drawn criticism from legal experts. The revisions are seen as an attempt to prevent customers from participating in mass arbitration and limit the company’s liability. Customers have already responded with class action lawsuits and attempts to opt out of the revised terms. The controversy highlights ongoing concerns about forced arbitration and the power dynamics between corporations and consumers.
Background: Forced Arbitration and Terms of Service
Prior to the data breach, 23andMe already included a clause in its terms of service that compelled customers to resolve disputes through arbitration instead of pursuing jury trials or class action lawsuits. While arbitration is often presented as a faster and more cost-effective alternative to lawsuits, critics argue that it favors corporations and deprives customers of their right to file a lawsuit. Many customers may not be aware that they have waived their constitutional rights by accepting the company’s terms of service.
Changes Aimed at Preventing Mass Arbitration
The revised terms of service now effectively prohibit customers from participating in mass arbitration. Lawyers point to a specific section that requires customers to engage in an initial dispute resolution period with 23andMe before filing an arbitration claim. This provision makes it difficult for multiple individuals with similar claims to join together in arbitration, a process that has led to significant payouts for companies in the past. For 23andMe, the goal appears to be avoiding the financial burden of large-scale arbitration and discouraging customers from seeking legal recourse.
Experts Criticize the Company’s Strategy
Experts, including lawyers specializing in data breaches and arbitration, have criticized 23andMe’s revised terms of service. They argue that the changes are designed to weaken customers’ legal position and protect the company from accountability. By making arbitration more burdensome and confidential, 23andMe aims to deter customers from pursuing claims and make it easier for the company to avoid facing collective legal action.
Customer Reactions and Legal Action
Following the disclosure of the data breach and the changes to the terms of service, some 23andMe customers have taken action. Two law firms in Canada have filed class action lawsuits on behalf of Canadian victims, while a woman in Illinois has filed a class action lawsuit against the company. These legal actions challenge 23andMe’s attempt to limit customers’ involvement to individual suits. Efforts to opt out of the revised terms of service have also been reported, although it is unclear how the company is responding.
