Class-action arbitration versus class-action lawsuit

Question

The Steam Subscriber Agreement has an interesting clause in its "Dispute Resolution/Binding Arbitration/Class Action Wavier" section:

If any part of Section 11 (Dispute Resolution/Binding Arbitration/Class Action Waiver) is found to be illegal or unenforceable, the rest will remain in effect (with an arbitration award issued before any court proceeding begins), except that if a finding of partial illegality or unenforceability would allow class, collective, or representative arbitration, all of Section 11 will be unenforceable and the claim or dispute will be resolved in court.

It sounds to me like Valve wants to avoid class-action lawsuits, but really wants to avoid class-action arbitration. Is there a particular feature of class-action arbitration under the American Arbitration Association rules that would make it even less appealing to a large company than a class-action lawsuit?

Answer 1

Is there a particular feature of class-action arbitration under the American Arbitration Association rules that would make it even less appealing to a large company than a class-action lawsuit?

There is no appeal even if the arbitrator ignores the law and comes to a conclusion not supported by the facts. This is tolerable when you are fighting thousands of small claims. It is much more problematic when all of your eggs are in the one basket of a single class action case.

There can also be much more limited discovery in arbitration.