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American Antitrust Institute Supports Senator Al Franken’s Arbitration Reform Bill

Monday, January, 6, 2014

The American Antitrust Institute (AAI) has endorsed the recent legislation drafted by Senator Al Franken designed to reform the Federal Arbitration rules in the United States.  The bill, known as the Arbitration Fairness Act of 2013 (AFA), would change the Federal Arbitration Act (FAA), invalidating the mandate for individual arbitration of antitrust disputes.


The intent of the legislation is to prevent recent Supreme Court decisions from eliminating class actions including class arbitration as vectors of relief in antitrust violations.  The belief of the AAI is that elimination of class action arbitration and litigation in antitrust cases would reduce potential damages to such an extent as to make existing antitrust laws toothless.  It also seeks to eliminate class action “waivers” often inserted into online agreements or so-called “adhesion” contracts without the knowledge of the signatories who often are assumed to not read the agreements they are “clicking through.”


Towards this goal, Section 3 of the bill seeks to make these sorts of unseen insertions into agreements non-enforceable as they can eliminate wholesale any class action whatsoever against the company entering into the agreement.


Senator Franken’s office did not offer comment on the AAI’s endorsement.