The Law and Business of Social Media
November 04, 2019 - Terms of Use, Online Contracts, Litigation

Just Browsing: District Court Finds Browsewrap Agreement Enforceable

Just Browsing: District Court Finds Browsewrap Agreement Enforceable

Courts continue to grapple with the enforceability of online agreements. While courts generally enforce clickwrap agreements—online agreements where users affirmatively show their acceptance after being presented with the terms, usually by clicking “I agree”—browsewrap agreements have stood on shakier enforceability grounds. Browsewrap agreements are online terms that, unlike a clickwrap agreement, do not require any affirmative indication of consent. Indeed, users can often continue using a website without ever viewing the terms of a browsewrap agreement, or possibly even knowing they exist. As the Northern District of California’s decision in Alejandro Gutierrez v. FriendFinder Networks Inc. demonstrates, browsewrap agreements are not always unenforceable, but reaching such a determination can be a highly fact-specific inquiry requiring significant discovery—including discovery of offline activities, such as phonecalls between the user and the online service provider. (AFF) is an online dating website. The website is generally free, although users can pay for particular upgrades and services. Users must register to use the site, and AFF collects users’ personal information as part of the registration process. Use of AFF is governed by the site’s Terms of Use (the Terms). Users don’t have to explicitly agree to the Terms in order to register or use AFF, but the Terms are readily available on the site, and they state that continued use of AFF constitutes acceptance. The Terms also include an arbitration provision.

Gutierrez began using AFF at least as early as July 2003, and continued using it for over a decade. Throughout this time, he provided personal information to AFF, including his name, address, credit card information, and photos.

Gutierrez alleges that, in October 2016, someone hacked AFF’s systems and downloaded the personal information of 339 million AFF users. Based on this security breach, Gutierrez brought a putative class action in the federal district court of the Northern District of California against FriendFinder Networks, Inc. (“FriendFinder”), which owns and operates AFF. FriendFinder sought to dismiss the action and compel arbitration, based on the arbitration provision in the Terms. Gutierrez argued that he was not bound by the arbitration provision, because he never agreed to the Terms.

Ultimately, the court found that Gutierrez did in fact agree to the Terms, despite the absence of evidence that he had ever viewed them, and granted FriendFinder’s motion to compel arbitration. According to the court, the Terms could be considered a browsewrap agreement because AFF did not require users to expressly indicate consent, or visit any page containing the Terms, before registering and using the site. Although browsewrap agreements are rarely enforced, the court found that the Terms were enforceable against Gutierrez in this instance. According to the court, Gutierrez was on inquiry notice that his continued use of the site would constitute an indication of his intent to be bound, and Gutierrez in fact gave such an indication by using the site after receiving the notice.

Importantly, the court based its finding on a 2013 call between Gutierrez and a FriendFinder customer support representative. Gutierrez called FriendFinder customer support after losing access to AFF. The representative informed Gutierrez that he’d lost access to AFF because he had posted his email address in an AFF chatroom “in violation of [AFF’s] Terms of Use.” When Gutierrez said he didn’t understand why posting in a chatroom was “such a big deal,” the customer support representative explained, “Because we set restrictions on the website . . . .  you need to follow our rules and regulations.” According to the court, this conversation constituted notice to Gutierrez that, if he wanted to use AFF, he would be bound by the Terms. Once Gutierrez regained access to AFF, he continued using the site. Although he never read the Terms, the Terms were readily available on AFF. Because Gutierrez continued to use AFF after the representative notified him that the Terms govern his use of the site, and because the Terms clearly state that continued use of AFF constitutes acceptance, the court found that Gutierrez had in fact accepted the Terms.

Although the court ultimately enforced AFF’s browsewrap terms, this case should still be a warning to website operators about the risks of using browsewrap agreements. The court could have reached a different decision if the plaintiff hadn’t had a separate customer support call that mentioned the Terms, or if FriendFinder had been unable to produce evidence of the call.