For many years, wireless carriers have included a clause in their wireless contracts that requires subscribers to waive their right to sue for damages and, instead, agree to arbitration. This option has not often been enforced, because the legal standing on force arbitration is sticky, to say the least. A case that landed in the California Supreme Court in 2017 ended with a ruling that stated,
an arbitration agreement that waives the right to seek the statutory remedy of public injunctive relief in any forum is contrary to California public policy and therefore unenforceable.
This situation has created a legal for AT&T, who is currently trying to enforce the arbitration clause in a case that surrounds location data. The company has been sued by a group of people who are upset that AT&T sold users' real-time location data. The case is a class-action, representing the whole of AT&T subscribers by a subset represented by Electronic Frontier Foundation (EFF) attorneys. The EFF argues that the forced arbitration clause is invalid because of the California Supreme Court ruling, while AT&T has filed a motion to compel arbitration, claiming that the ruling is invalid.
The issue at the heart of the case is an important on. AT&T sold location data for subscribers through two location data aggregators: LocationSmart and Zumigo. The company has ended the practice, but not before violating the privacy and potentially the safety of their subscribers. According to the lawsuit,
Despite vowing to its customers that it does not "sell [their" class="UpStreamLink"> Personal Information to anyone for any purpose," AT&T has been selling its customers' real-time location data to credit agencies, bail bondsmen, and countless other third parties without the required customer consent and any legal authority. AT&T's practice is an egregious and dangerous breach of Plaintiffs' and all AT&T customers' privacy, as well as a violation of state and federal law.
It seems that AT&T knows that the only way for them to avoid a major legal embarrassment is to avoid the lawsuit in the first place. Unfortunately for them, and luckily for customers, there is little chance the arbitration clause will be nullified.