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What we learned from the Samsung Mass Arbitration case

Aug 09, 2022
Shamis & Gentile, P.A.

In the first half of 2022, the multinational electronics giant Samsung faced a slew of allegations that it had violated its users’ rights to privacy. The result was a countrywide Samsung mass arbitration that saw a growing number of people sign up to claim compensation for the violation. Shamis & Gentile, P.A. was one of the law firms that represented Samsung users in arbitration against the tech giant. Here are the essentials of the case and of the practice of arbitration.  

What was the Samsung Biometric Privacy Case?

The case started at the beginning of 2022, when a number of consumers who owned Samsung Galaxy phones and tablets alleged that the corporation had collected and stored their facial scans without their prior knowledge and consent. If these allegations turned out to be true, then Samsung would clearly be violating its users’ privacy. The company has still yet to explain why it chose to run a sophisticated facial recognition technology in the background of its Gallery app to create face templates – without the users’ knowledge. As more and more people came forward to file complaints against the corporation for the same reason, it became clear that there was merit in the case. 

At least one lawsuit was filed against Samsung, but then an interesting complication arose. The company’s legal team argued that users could not actually sue Samsung – over this or any other matter. The reason for this is that, when users buy and set up their devices, they agree to arbitrate any claims that might arise against the company. As a result, attorneys could not handle the matter as a class action lawsuit, and so we have treated it as a mass arbitration.

What is arbitration?

When a complaint is taken to arbitration, it does not go to court and is not treated as a lawsuit. Instead, by the agreement of both parties, the matter is submitted to one or more arbitrators who then make a binding decision on the dispute. The matter is thus resolved through private negotiations, rather than being tried by a judge and jury. Arbitration is entirely consensual for both parties, and the parties themselves get to choose the arbitrators (with the help of their legal advisors, and as long as the arbitrator is chosen by mutual consent). The arbitrator is a neutral party, and their decision is final.

The problem with individual arbitration is that it is often used as a tactic by major corporations to keep complaints against them out of open court, and funnel them into the less formal and unappealable world of arbitration. Statistics show that consumers are less successful in individual arbitration than in lawsuits. Many of the rights and procedures built into court proceedings are absent from arbitration, and the corporations can often use this to their advantage. Mass arbitration is a remedy against this tactic, however. Provided law firms are willing to take on the work involved with preparing for mass arbitration, they can essentially call the corporations’ bluff and have achieved some considerable successes as a result. 

Why file a Mass Arbitration lawsuit vs. a class action lawsuit?

In most cases – the Samsung situation is a good example – mass arbitration is a route you would take only if a class action lawsuit is not an option. Ideally, when you have a justified complaint against a corporation, you should be able to air that complaint in open court and let the judge make the final decision. However, this is exactly what corporations such as Samsung want to prevent – it’s why they have included arbitration in their terms of use. In these cases, mass arbitration is really the only available option – and it is also a way to play the corporations at their own game.

When there are enough numbers to make up a mass arbitration, lawyers file thousands of individual arbitrations against a single company. Since the companies usually offer to pay the fees involved with arbitration (assuming or hoping that only a few people will choose this option) they find themselves faced with unimaginable cumulative costs as the mass arbitration applications come in. 

For more information on mass arbitration in general, or to join the Samsung mass arbitration, contact Shamis & Gentile, P.A.

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