Roku's New TOS Makes It Nearly Impossible to Sue the Company

If you want to keep using your Roku box or the Roku app on your TV, you will have to waive the right to sue Roku at any time in the future. And there's nothing you can do about it.

Roku's new terms of service, that thing you always automatically click 'agree' to whenever any of your software gets updated, now explicitly prohibits you from taking part in any class-action lawsuits. Instead, you agree to waive those rights in favor of binding arbitration. So far, that's all pretty standard. Companies from all industries have been doing this for years. But for Roku, it's only the start. This is where its legal shenanigans start to get really interesting.

"Over the past several years, a cottage industry of mass arbitrations has sprung up," David Siegel, a partner at Grellas Shah, LLP, told Lifewire via email. "[T]he law firm files those thousands of claims in arbitration, requiring the defendant (the online service provider—like Roku) to pay millions of dollars in arbitration fees. Companies have tried to get out of these mass arbitrations through the court system. That has been unsuccessful."

"Roku is going down a different path that can be seen in plenty of other large companies (e.g., DoorDash). The strategy is to make it so onerous and uneconomical to bring a small consumer claim that none get filed."

Impossible Mission

Roku's workaround is to make arbitration so annoying that nobody will bother. For example, you must first write Roku a letter and then meet with them in person or by video for a negotiation–with or without your lawyer.

If you manage to sit through that, then arbitrations are limited to only 20 claims, which means that most class-action lawyers won't bother. And these 20 arbitrations must take place before 20 different arbitrators, says Siegel.

It doesn't even stop there. Next comes a mandatory mediation, and if Roku doesn't get the result it wants, it kicks the claim back to the courts, where the court itself must first allow the court action.

"In other words, Roku will never have to pay the huge arbitration fees associated with the mass of arbitrations anyway. They get to use arbitration as a method of increasing costs of the claimants and abandon it when it would impose a cost on Roku," says Siegel.

No Option

So what can you do about this? While Roku's case seems to be a laundry list of all the worst ways a company can weasel out of accountability, it's far from the only one. And chances are, you would not even know about it had you not read this article.

The bad news is, there's very little you can do. To continue using your Roku device or app, you have to click to agree to these terms, whether you like it or not.

"Unfortunately, there is not much consumers can do about onerous terms of service for services like Roku. Courts view these services as optional and that consumers can opt-in or opt-out," attorney at law Ed Hones told Lifewire via email. "Therefore, there is almost no limit on how onerous the terms of service can be."

In the case of Roku specifically, there is an option to opt out, in writing (yes, you have to mail them a paper letter) within 30 days. Even that is a major pain, requiring the names of all people opting out, their contact details, and more details, and a copy of your purchase receipt for hardware.

But again, who really ever looks at these terms before clicking to agree? David Siegel recommends that we always look for the option to opt out and take it, but that means reading through pages and pages of legal spiel, which companies know we almost never do.

This story comes at the same time as streaming services are adding ads, upping prices, and designing their apps to make them deliberately more annoying for users. And it's not just streaming apps. As more and more of our lives take place in cloud software and subscription-based apps, we have less and less control over the platforms we use and how they (mis)use and share our data.

The alternative is to go back to apps from small, trusted developers, but only super nerds will go there. What's needed is a change in the law to help users of digital services, and David Siegel agrees.

"Also, honestly, congressional action can help. That is where things have to change," says Siegel.