Internet Law

Clickwrap Agreement Case: Automatic Billing Enrollment

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Certain clickwrap, browserwrap and sign-in wrap agreements may soon be under legal fire. Anyone using — or considering using — these contracts should set aside a minute to read this post.

In-Flight Wireless Provider Accused of Using Tricky Clickwrap Agreement And Overcharging Consumers

Gogo LLC (“Gogo”) provides airplane wireless services. In fact, it dominates the in-flight Internet connection niche. But if a proposed class action lawsuit against Gogo is green lit, one of the possible rulings could be an Internet law game-changer regarding sign-in wrap user agreements.

User Contract Includes Fine Print

First, A Little About Gogo

Gogo was one of the first firms to recognize the profit potential of in-flight wireless service. Today, it’s one of the biggest players in the field. Passengers crisscrossing the globe can choose between Gogo’s monthly (about $40 a month) and daily (about $10 a day) packages.

The Different Types of “Digital Wrap” Agreements

Browserwrap Agreement (also browse-wrap and browser-wrap) = Consent is given by using the site; Clickwrap Agreement (also click-wrap) = User must click “I agree” to accept the terms; Scroll-Wrap Agreement = User must scroll to the bottom of a document, and then click to accept terms; Sign-In Wrap Agreement = The act of signing up to use a given service constitutes assent to the terms.

Clickwrap Agreement Lawsuit filed in 2014

According to at least two Gogo clients – Adam Berkson and Kerry Walsh – the company may be enrolling unwitting participants in a monthly billing program; the pair’s claim may spawn a class action lawsuit.

Plaintiff’s Fundamental Argument In Gogo Class Action

Berkson, Walsh, and a handful of yet unnamed Gogo customers believe the in-flight internet company is taking consumers for a ride. How? By tricking people into an automatic monthly service package as opposed to the one-time agreement most people think they’re buying. Plaintiffs insist that misleading graphics and an unclear terms of service all contributed to the deception.

Even though Gogo’s user agreement included an arbitration waiver, the judge ruled that in this case, customers are “not bound by mandatory arbitration and waiver of venue provisions.” Average users, the court also opined, “would not have been informed, in the circumstances presented in this case, that [they were] binding [themselves] to a sign-in-wrap.”

The class certification hearing is on July 9, 2015.

Judge Exhibits Some Tech Acumen at Clickwrap Agreement Hearing

The presiding judge in Gogo’s terms-of-service lawsuit has, encouragingly, exhibited a bit of tech acumen. Specifically, he considered color-coded graphics detailing “eye-tracking tendencies” that analyzed “comprehension between the printed page and computer screen and how the average user interacts with privacy policies, web-based advertisements and hyperlinks.”

Potential Consequences If This Browser Wrap Class Action Is Successful

Main Legal Question: Which Types of User Agreements Should Be Made Illegal?

If the Gogo class action moves forward, the main question will be: “How should courts deal with hybrid versions of browser wrap, click wrap, and electronic contracts of adhesion – a.k.a., sign-in wrap?”

Showing a cheeky side, during the latest hearing, the presiding Judge quoted John Oliver, condemning: “If Apple put the entire text of Mein Kampf in their user agreement, you’d still click agree.”

Kelly / Warner handles all manners of internet law litigation and compliance issues. To learn more about our practice, go here.

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