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Cloud Storage Company DropBox Adds Binding Arbitration Clause – with an Opt Out

Tuesday, February, 25, 2014


DropBox, one of the leading cloud storage companies offering users Internet-based backup and file storage services, has added binding arbitration language to their latest Terms of Service (ToS) update.  While this follows a trend of corporations adding arbitration language to terms of service, DropBox has offered its users a choice: They are able to “opt out” of the new arbitration clause within 30 days of accepting the new terms.


The opt-out clause is unusual.  The vast majority of companies adding arbitration clauses do so without consulting their customers or offering any sort of opt-out option outside of rejecting the ToS entirely and thus the service itself.  Arbitration is often touted by corporations as a superior solution to the courts: Faster, less expensive, and more streamlined.  Some consumer advocates, however, have argued that so-called “forced” arbitration clauses buried in lengthy ToS language is designed to be beneficial mainly to the corporations while robbing consumers of the right to bring grievances to the courts.


In another unusual move, DropBox has made the Opt-out process very simple, providing a brief web-based form to fill out.  Other Opt-out options offered by corporations have typically involved complex letters directed to obscure offices.  The new Terms of Service are rolling out according to a staggered schedule, so it will be some weeks before any data on the Opt-out is available.