Page 198 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 6 UGC Platforms’ Entitlement to UGCs
An Intermediary-oriented Approach

arbitrator (at least US$150 per hour) are extremely high, and must be borne by the parties.
Deep-pocketed intermediaries can afford them, whereas individuals are unlikely to have
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the same resources. Further, UGC platforms can choose a forum and arbitrator they are
familiar with. The confidentiality of arbitration is even more hospitable to UGC platforms.
The process and outcomes of arbitration are kept secret, meaning that UGC platforms’
reputation is not damaged if they lose the arbitration. UGC platforms can even continue
the behaviour that was found to be illegal in the arbitration because an arbitration award is
confidential. Due to the preference for arbitration over litigation, many UGC platforms, such
as MySpace, Flickr and IMDb, have incorporated a mandatory arbitration clause into their
ToUs/ToSs.
The Federal Arbitration Act passed by the US, which ‘embod[ies] [a] national policy
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favouring arbitration’, explicitly affirms that the arbitration clause arising out of a contract
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‘shall be valid, irrevocable, and enforceable’. This is why US based UGC platforms have
adopted mandatory arbitration clauses much more often than their non-US counterparts, as
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shown by my dataset. Nevertheless, the US Supreme Court confirmed that this provision
does not preclude general contract defences, such as fraud, duress or unconscionability.
The courts can still invalidate unconscionable arbitration agreements without contravening
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the Federal Arbitration Act. For example, in Bragg v. Linde, the court held the arbitration
clause to be substantively unconscionable because it ‘forces the weaker party to arbitrate
claims but permits a choice of forums for the stronger party’. In other words, the
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arbitration clause must be beneficial to both parties.
The other part of the dispute resolution provisions is the clause pertaining to the
choice of forum and law. This has also been highly debated and is closely related to the
conscionability of the provisions, as the court found in Bragg v. Linde. UGC platforms
design these clauses and tend to select the forum and law they are most familiar with. As
a result, many users live great distances from the selected forum and are unfamiliar with
the selected law, which could prevent them from seeking a legal remedy. According to
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a survey by the US National Consumer Law Center, the misuse and abuse of arbitration

189 Manu Sebastian, ‘Charging Exorbitant Fee Can Lead To Termination Of Arbitrator's Mandate’ (Live in Law, 5 January 2019)
<https://www.livelaw.in/news-updates/exorbitant-fee-rajasthan-hc-terminates-mandate-of-arbitrator-for-charging-exorbitant-
fee-beyond-prescribed-limit-read-judgment-141875> accessed 18 May 2019.
nd
190 Nicosia v. Amazon.com, 834 F.3d 220,228 (2 cir., 2016) (citing AT&T [*229] Mobility LLC v. Concepcion, 563 U.S. 333,
346, 131 S. Ct. 1740, 179 L. Ed. 2d 742 (2011)).
191 9 U.S.C. § 2, Federal Arbitration Act.
192 Among US-based UGC platforms, MySpace, Flickr, IMDb, Quora, Wordpress, Asianfanfics have incorporated a mandatory
arbitration clause, Pinterest strongly encourage arbitration. Whereas none of the non US-based platforms has adopted a
mandatory arbitration clause.
193 Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681, 687 (1996);
194 Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593, 608 (E.D.Pa. 2007).
195 Rustad and others (n 186) 670.

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