Social Media and the Rise in Consumer Bargaining Power
14 U. Pa. J. Bus. L. 661 (2012)
39 Pages Posted: 27 Sep 2013
Date Written: 2012
Consumers are constantly entering into form contracts, both offline and online. They do not read most of the terms, but the duty to read says the contracts are nevertheless fully enforceable. Moreover, consumers lack any real bargaining power when assenting to such contracts with merchants. Not only that, but if the products malfunctions, or they are somehow damaged by it, they will likely face the prospect of being limited in their available remedies because of boilerplate terms which are favorable to the merchant. In the “old days,” the consumer had no real recourse but to call a 1-800 number, and hope to catch a customer service representative on a good day. Otherwise, the company would likely stand behind its contract term and deny any relief. Recently, however, several notable consumers have taken their complaints to the web 2.0 world of social media, either through Facebook or Twitter, or YouTube videos. Some of these consumers’ postings have gone “viral,” generated lots of attention, and thereby caused their merchants to reconsider dealing with their problems. As such, an interesting shift in bargaining power has arguably occurred, giving such consumers a greater voice in negotiating favorable contractual outcomes with their much more well-capitalized merchant contracting partners. This article describes this phenomenon, and discusses some of the favorable implications for consumers and contract law.
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