Patreon and payment processors could be held accountable for censorship under new Californian arbitration law

Platforms such as Patreon have been banning users, severing the ties between creators and customers.

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Over the last few years, we’ve watched creators get banned from platforms like Patreon, Twitter, YouTube, Facebook, and others.

Platforms that, above all else, have little competition.

As such, getting banned from them usually means you no longer have access to that mode of interaction with people that you may have spent months or years building.

In Patreon’s case, this could mean your entire livelihood.

The traditional stance is that private companies are not compelled to uphold people’s rights of free speech or otherwise.

However, California’s recently passed legislation of SB-707 could change that.

The argument is that, when a platform like Patreon bans a creator, they are disrupting “the economic relationship between Creator and Backer,” which is legally considered “tortious interference with a business relationship,” suggests lawyer Mike Cernovich, (who is perhaps most notable for filing the lawsuit that unsealed documents in Jeffrey Epstein’s sex-trafficking case, resulting in Epstein being taken into custody).

Patreon can still ban whomever they want, of course, but Backers can dispute Patreon’s decision and have it be sent to arbitration, since they can no longer support their Creators and potentially lose the unique content that their Creators produce with the support of Backers.

What this means for Patreon, among other things, is that they have to pay the arbitration fees in advance, which can be more than $10,000 per case.

The total can stack up pretty high depending on the number of Backers disputing the banning of a particular Creator.

In other words: Patreon would be looking at paying millions of dollars in advance in filing fees alone.

Of course, there are also legal fees involved.

On February 10th, a federal judge ordered food-delivery service DoorDash to pay $9.5 million in their share of arbitration fees for over 5,000 delivery drivers’ demands.

U.S. District Judge William Alsup is quoted saying “You’re going to pay that money. You don’t want to pay millions of dollars, but that’s what you bargained to do and you’re going to do it.”

Amusingly, Patreon has updated their Terms of Service on January 3rd in response to the legislation: “You may not bring a claim against us for suspending or terminating another person’s account, and you agree you will not bring such a claim. If you try to bring such a claim, you are responsible for the damages caused, including attorneys fees and costs.”

This update isn’t likely to have much of an effect, Cernovich argues, and especially not for users that have signed up for the service before the update.

He also argues that “this provision is unlawful and unenforceable, because Patreon demands all users abide by JAMS Streamlined Arbitration Rules and Procedures:’

If a dispute does arise out of these terms or related to your use of Patreon, and it cannot be resolved after you talk with us, then it must be resolved by arbitration. This arbitration must be administered by JAMS under the JAMS Streamlined Arbitration Rules and Procedures, except as expressly provided below. Judgment on the arbitration entered in any court with jurisdiction. Arbitrations may only take place on an individual basis. No class arbitrations or other other grouping of parties is allowed. By agreeing to these terms you are waiving your right to trial by jury or to participate in a class action or representative proceeding; we are also waiving these rights.

What’s perhaps more interesting is that this also applies to PayPal, Venmo, CashApp and any other payment gateway.

If you're tired of censorship and dystopian threats against civil liberties, subscribe to Reclaim The Net.

Tired of censorship and surveillance?

Defend free speech and individual liberty online. Push back against Big Tech and media gatekeepers. Subscribe to Reclaim The Net.

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