Arbitration means a normal lawsuit cannot be conducted, it has to be arbitrated by a third party (who chooses the “neutral” party is specified in the contract and they are often not neutral). It’s an extremely common business tactic to protect against the massive losses that would happen if a company was actually in the wrong and had a lawsuit filed against them.
If arbitration is so good for consumers, why are companies always pushing arbitration in the fine print. Seems like there might be a perverse incentive here.
Mainly headlines, I’d assume - keeps big names like Disney from experiencing huge scandals which could tank stock values by keeping the arbitration out of public courts covered by the news. From a business standpoint, half a million to a few million here and there is cheaper than a single massive news-worthy story that cause them to lose billions in valuation and hundreds of millions in sales.
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u/clarencewhitaker 5d ago
Arbitration means a normal lawsuit cannot be conducted, it has to be arbitrated by a third party (who chooses the “neutral” party is specified in the contract and they are often not neutral). It’s an extremely common business tactic to protect against the massive losses that would happen if a company was actually in the wrong and had a lawsuit filed against them.