By Katerina Kakkis
In 2023, a husband lost his wife to an avoidable allergic reaction at a Disney restaurant in Florida. When he sought accountability for his wife’s death, Disney asked the court to toss the case because of a binding arbitration clause—a clause in a contract the husband entered into when he signed up for a free trial of Disney+ in 2019.
To participate in modern digital markets, consumers must enter these unbargained-for wrap contracts with businesses. Lurking in many such contracts is unassuming and obscure legalese that extends the enforceability of consequential contract clauses to a business’ limitless affiliates, subsidiaries, related parties, parents, and related services. By agreeing to these terms, consumers give up legal leverage not only to the company on their screens, but also to that company’s invisible corporate web. This Note calls this contractual sleight-of-hand the ‘infinite privity’ problem.
The ‘infinite privity’ problem deserves attention from the key stakeholder in the United States’ consumer protection regime—the Federal Trade Commission. Under its well-established unfair practice rulemaking authority, the FTC should prohibit the enforcement of infinite privity when it unjustly strips consumers of their legal rights. The new rule would not seek to disrupt the freedom of contract between a business and its consumers, but rather reinforce the bounds of that relationship to the parties actually exchanging value with each other.