The arbitration clause won't hold for any visitors from Europe.
Without prejudice to any other administrative or judicial remedy,
every data subject shall have the right to lodge a complaint with a
supervisory authority, in particular in the Member State of his or her
habitual residence, place of work or place of the alleged infringement
if the data subject considers that the processing of personal data
relating to him or her infringes this Regulation.
That's just for GDPR violations of course.
Also a TOS can never override local laws. When you serve European users you're subject to European laws and local country laws.
Nothing will stop European users to complain to local authorities to lodge a complaint or to start a court case within Europe.
Schrems said the ruling was a “huge blow” for Facebook as his
individual lawsuit against the company could go ahead in a Vienna
court and Facebook would have to explain whether “its business model
is in line with stringent European privacy laws.”
Facebook also tried to argue that its Terms of Service say that any
Facebook user can only sue it in the United States. The courts
disagreed and called Facebook’s policy “abusive.”
So, those TOS terms about the arbitration will never fly for European users. So you should either add a clause that it will only apply for Non EU users, or drop it.
Dutch law even states(found thanks to the comment of Adriaan)
Bij een overeenkomst tussen een gebruiker en een wederpartij,
natuurlijk persoon, die niet handelt in de uitoefening van een beroep
of bedrijf, wordt als onredelijk bezwarend aangemerkt een in de
algemene voorwaarden voorkomend beding
Translation and emphasis mine
In the event of an agreement between a user and a counterparty,
natural person, who does not act in the exercise of a profession or
business, an condition shall be deemed unjustly onerous when the the
general terms and conditions includes one of the following
N) dat voorziet in de beslechting van een geschil door een ander dan de
rechter die volgens de wet bevoegd zou zijn, tenzij het de wederpartij
een termijn gunt van tenminste een maand nadat de gebruiker zich
schriftelijk jegens haar op het beding heeft beroepen, om voor
beslechting van het geschil door de volgens de wet bevoegde rechter te
N) this provides for the settlement of a dispute by a party other than the court that would be competent according to the
law, unless it grants the other party a period of at least one month
after the user has invoked the clause in writing to the clause, in
order to settle the matter. to decide the dispute by the judge
competent according to the law;
Section N sounds awfully lot like the arbitration clause, even up to the month opt out mentioned.
Additional comment from Adriaan that adds some details.
Note that Dutch law isn't explicitly against mandatory arbitration; you need the month opt-out after the start of the dispute and you have the right to an independent judge/arbiter. It can be picked by the sector as a whole, but not by SE only (source) So the arbitration clause as currently written isn't going to hold up, but is doesn't mean any form of an arbitration clause is illegal under Dutch law.
From the article posted by Nemo in the comments
It's a very interesting read that shows how consumer laws evolved within Europe. I highly suggest to read it. Very informative.
I'll do my best to give a summary of the most important bits highlighted in the article.
I really like the motivation given for providing consumer law. To protect the weaker party. To prevent the twisting of arms sort to say.
The two aforementioned traditional principles of private international law (the principle of
the proper law and the principle of the freedom of choice) are now complimented by the
principle of “protection of the weaker party”33. The principle is based on the presumption
that the parties to a consumer contract are not contractually and economically equal. That is
why legislator considers it necessary to protect the weaker party by the rules of law (in
particular, private international law). The rules which are more favorable to the weaker
party than the general rules (for business to business relations) should apply.
Up unto about page 23 it talks about the old Rome convention, interesting but not relevant.
Then around page 23 it starts about the the Brussels convention giving even more protection to consumers than on the older laws mentioned before.
Giving the consumer the right to choose in which country to go to court, after the dispute has risen. Some conditions apply, but a safe bet is the home state.
The Brussels Regulation Article 17 deals with the choice of jurisdiction in consumer
contracts. Thus, the parties can choose the jurisdiction other than indicated by the Article
16 only if it was agreed by the parties after the dispute has arisen, or if it allows the
consumer to bring proceedings in courts other than those indicated in the Article 16 (i.e.
gives the consumer more choices), or if the parties were domiciled or habitually resident in
the same Member State at the time when the contract was concluded which confers
jurisdiction to the courts of this Member State. Thus, the principle of the freedom of
choice is limited in the Brussels Regulation. Particularly, the Brussels Regulation does not
permit to deprive a consumer of the protection by choosing the jurisdiction outside the
country of his domicile. In any case if the consumer contract satisfies the requirements of
the Article 15 (1) (c) the consumer is entitled to refer to the court of his domicile.
And they made rules even stricter for to whom it applies. Basically if you target European consumers, you're in the club and have to play by the rules.
Thus the consumer contract falls under the judicial protection of the Regulation if
it “has been concluded with a person who pursues commercial or professional activities in
the Member State of the consumer's domicile or, by any means, directs such activities to
that Member State or to several States including that Member State, and the contract falls
within the scope of such activities”
So basically anyone using Stack Overflow, from Europe, falls under the European consumer protections. This gets re-confirmed later on.
Page 37 about the improved Rome convention removes some ambuigities
Thus, a consumer contract:
1) is governed by the substantive law of consumer‟s habitual residence if choice of law
hasn‟t been made by the parties; or
2) if the parties have chosen another law to regulate their contractual relations, this law
applies, but the choice cannot deprive the consumer of the protection afforded to him by
mandatory rules of the country where he has his habitual residence.
Basically the double rule left completely unchanged from the Rome Convention
So Stack Overflow can say they want USA, but they can't force it to circumvent EU memberstate protections
Page 39 gives us this nice bit
Article 6 (1) (b) alternative requirement: The contract is concluded between
the consumer and the professional who, by any means, directs professional
or commercial activities to111 the country of consumer‟s residence or to
several countries including this country and the contract falls within the
scope of such activities.
Stack Overflow surely targets European users, directs activities to European markets. I would say this makes it binding to fall under the EU protections.
This confirmed on page 43
Thus the Proposal for the Brussels Regulation set the following cumulative criteria:
1) The site has to be interactive (consumers must at least have a possibility to enter
into contract via this website); and
2) The site should be accessible in the state of consumer‟s domicile.
Stack Overflow would fall in the interactive category, making it subject to the laws.
An interesting article that with the bits quoted here, but also in full read, confirming that the arbitration clause is moot for European users.
EDIT, found some more stuff
I found this nice tidbit on the eurlex
COUNCIL DIRECTIVE 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts
Got to love that title.
A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.
The fact that certain aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assessment of the contract indicates that it is nevertheless a pre-formulated standard contract.
Where any seller or supplier claims that a standard term has been individually negotiated, the burden of proof in this respect shall be incumbent on him.
The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.
ANNEX TERMS REFERRED TO IN ARTICLE 3 (3)
excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.
Then there is this interesting answer: How does SE's arbitration clause hold up under the GDPR?
But let your lawyers decide about this fun issue that spans multiple jurisdictions worldwide. Maybe let them read that article.
Where the parties on either side are **very numerous**, and cannot, without manifest inconvenience and oppressive delays in the suit...The whole point is to reduce cost and expedite the process.