The mandatory binding arbitration clause found in Valve’s updated software service agreement (SSA) for Steam is not valid in Canada, according to a specialist lawyer who has spoken with Hardware Canucks.
Mandatory binding arbitration clauses are put in place to prevent a class-action lawsuit from being leveled against a company. Electronic Arts has a mandatory binding arbitration clause in its Origin Terms of Service, and some of Microsoft’s End User License Agreements include these clauses as well (though users are able to opt-out of that clause).
Valve justified the inclusion of the clause in a press release by arguing that “[class action suits] impose unnecessary expense and delay, and are often designed to benefit the class action lawyers who craft and litigate these claims.”
In the United States, the April 2011 ruling of AT&T Mobility v. Concepcion solidified such clauses as the presiding judges ruled them enforceable under the Federal Arbitration Act.
Daniel Bach, a lawyer practicing at Siskinds LLP in Toronto, who specializes in class action suits, says that consumer protection legislation in most of Canada’s provinces would nullify this clause of Valve’s SSA.
Mr. Bach pointed to the rulings found in Seidel v. Telus Communications and Griffin v. Dell Canada to demonstrate that mandatory binding arbitration agreements are not applicable to consumers because of provincial Consumer Protection Acts (he did note that this doesn’t necessarily apply to businesses).
Likely, in the opinion of Mr. Bach, Valve sticks these clauses into common cross-market agreements — such as the Steam SSA — without much thought to their applicability.
“Class action suits are an important way to protect the community,” he said.
Valve has yet to respond to Hardware Canucks‘ repeated requests for comment.
