Pluralistic: Bluesky creates the world's weirdest, hardest-to-understand binding arbitration clause (15 Aug 2025)


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Bluesky creates the world's weirdest, hardest-to-understand binding arbitration clause (permalink)

I can't wait to use Bluesky, but I will not be joining Bluesky. As much as I trust and respect the Bluesky executives and board members I am acquainted with, I believe the service itself is insufficiently enshittification-resistant to trust:

https://pluralistic.net/2024/12/14/fire-exits/#graceful-failure-modes

I've met Bluesky's CEO Jay Graber on a few occasions and heard her speak several times and I'm hugely impressed with her documented commitment to make "enshittification-resistant" social media:

https://www.wired.com/story/bluesky-ceo-jay-graber-wont-enshittify-ads/

Some of Bluesky's most innovative and well-developed features are extremely enshittification-resistant, like "composable moderation," which gives users an extraordinary degree of control over their feeds, which means that the service's owners can't readily dial down the amount of desirable information in those feeds in order to create space for ads or posts that someone has paid to boost (or, as is the case with Twitter, the personal maunderings of the service's boss and whichever esoteric fascist crony talked to him last):

https://bsky.social/about/blog/4-13-2023-moderation

What's more, this composable moderation, along with an open API for clients, allows Bluesky (the company) to adhere to its legal obligations to block content, while allowing Bluesky users to sidestep those blocks. For example, Bluesky has a labeling service that flags content that has to be blocked under Turkey's system of authoritarian censorship, and, by default, the Bluesky client blocks anything with that flag for Turkish users. But users can turn off that block, and/or use an alternative Bluesky client that doesn't pay attention to the blocked-in-Turkey flag.

Same goes for the new British system of mass censorship under the Online Safety Act: Bluesky the company will do an age-verification process with users of its official client (like all age verification, this system is janky and it sucks), but UK users who choose a different client (one that isn't worried about being sanctioned by the UK government) can access all of Bluesky without any age verification.

But the key anti-enshittification measure – federation – has lagged on Bluesky. For most of Bluesky's history, it's been impossible to participate in the Bluesky service without being a Bluesky user, because the most critical parts of the Bluesky network were incredibly expensive to operate (tens of millions of dollars per year), and lacked any tooling to make it easy to create independent, federated servers.

Without the ability to participate on the Bluesky network without having to create an account with Bluesky (the company), users would have to subject themselves to Bluesky's terms of service, and could have their access to the Bluesky network unilaterally terminated by Bluesky (the company).

Now, I happen to think pretty highly of the management of Bluesky (the company) at the moment. But Bluesky has outside investors – the distressingly stupid- and sinister-sounding Blockchain Capital – and if these people get it into their heads to enshittify Bluesky, then can force good actors off the board of directors, fire the management, and replace them with standard-issue corporate sociopaths.

What's more, the fact that users are hostage to Bluesky – that they have no way to part ways with the company without parting ways with the people they value on the service – means that new management can torment Bluesky users with impunity, so long as these torments are kept to a level such that Bluesky users hate the company less than they love one another.

By contrast, with federation – the ability to part ways with the Bluesky company without losing access to the service – investors might understand that if they turn the screws on users, those users will find it trivial to leave the company's servers, because doing so won't cost them access to the service. And if the investors don't understand this, well, users can leave – without enduring any switching costs.

The good news here is that Bluesky has made enormous progress in true federation. The cost of operating a full Bluesky stack has fallen from tens of millions of dollars per year to tens of dollars per month:

https://whtwnd.com/bnewbold.net/3lo7a2a4qxg2l

This is an extremely welcome development and it goes a long way toward enshittification-proofing the Bluesky service, and some way to enshittification-proofing Bluesky, the company.

But Bluesky, the company, still needs serious work.

As things stand, Bluesky has very bad terms of service that every user who creates an account has to subject themselves to. In particular, Bluesky's ToS contain a "binding arbitration" waiver that forces users to surrender the right to sue Bluesky no matter how the company harms them. This is so pro-enshittificatory, it's like a landing strip for the sole use of Enshittification Airlines, which can land a 747 full of enshittfying nonsense on Bluesky's users every 10 minutes, around the clock, without worrying about any legal repercussions.

Binding arbitration used to be illegal. Sure, two entities of similar size and power could elect to streamline their disputes by seeing an arbitrator instead of going to court, but you couldn't take away people's right to sue just by cramming 40,000 words of legalese down their throat as they passed over your threshold. It took the absolute fuckery of an Antonin Scalia to unleash the plague of binding arbitration waivers on the world, with the result that these days, everyone from dentists to solar installers to ride-hailing companies force you to permanently waive your right to sue, even if they are so negligent or malicious that you are permanently maimed or killed:

https://brooklynworks.brooklaw.edu/cgi/viewcontent.cgi?article=1443&context=blr

These days, binding arbitration is everywhere, allowing corporations to proceed with total legal impunity. When a woman died of allergens in her Disney World meal (after being told it was allergen-free), Disney told her widower that he couldn't sue because he'd clicked through a binding arbitration waiver when he signed up for a free trial of the Disney Plus streaming service:

https://arstechnica.com/tech-policy/2024/08/disney-stops-claiming-disney-terms-require-arbitration-in-allergy-death-case/

Binding arbitration has been creeping into every corner of the internet, to the extent that lawyers will tell you that you must put it in your ToS "just to be safe." Those lawyers are either ignorant, or assholes (or, you know, ignorant assholes), but they're everywhere. Earlier this summer, Mastodon almost launched a new ToS (which would have been the default for every Masto instance) with binding arbitration, because their lawyers told them they needed it:

https://en.chuso.net/mastodon-tos-july-2025.html

Bluesky has just announced a new ToS, through which they claim they are improving on the binding arbitration waiver:

https://bsky.social/about/support/tos#governing-law

But what they've come up with is utterly baffling and nonsensical. I have re-read it at least a dozen times, and – despite having followed and written about binding arbitration for more than a decade – I have no idea what it means.

The new waiver says that you don't have to arbitrate for "claims that fraud, criminal misconduct, or gross negligence by Bluesky caused death or personal injury." That sounds good! It also sounds like everything that someone might sue Bluesky for, leaving me to wonder what Bluesky will make you arbitrate for.

What's more, if the point of a binding arbitration waiver is to reduce nuisance suits and threats, this completely nullifies that tactic, because all a nuisance litigant has to do is claim that they are suing because of "fraud, criminal misconduct, or gross negligence," and Bluesky is back in court.

All I can assume is that the point of this clause is to intimidate people with grievances against Bluesky out of seeking legal redress because they can't figure out if their claim is covered by this baffling, nonsensical clause.

There are other, gigantic red flags in the arbitration waiver, like a prohibition on class actions. Here's why that's especially bad in an arbitration waiver.

By default, arbitration is a) confidential and b) nonprecedential. That means that if a corporation injures a ton of people through negligence, fraud or malice, each victim of the company has to individually go before an arbitrator and prove their case, but they're not allowed to know how other victims argued their case, and the arbitrator is not required to judge two identical cases in the same way (earlier cases are not a precedent).

One way around this is mass arbitration, like the Uber drivers engaged in when Uber stole tens of millions of dollars worth of tips from them, a tactic successfully deployed by other corporate victims:

https://pluralistic.net/2021/06/02/arbitrary-arbitration/#petard

Class actions are the only way that corporations can be held to account for actions that victimize vast numbers of people in relatively small ways. If you've been injured to the tune of less than, say, $500, you probably won't hire a lawyer to get it back. Bluesky has 36 million users, meaning – thanks to the ban on class actions – it could steal about $18 billion from them all without having to worry about a gigantic, business-destroying lawsuit.

This is not how you enshittification-proof your service.

To be fair, the carve-out in the arbitration clause might help keep the company from committing this kind of fraud, but only if anyone could figure out what the hell it means. And also to be fair, the new arbitration clause provides for three arbitrators, one chosen by Bluesky, one by you, and a third, mutually agreed upon one.

This does inject more fairness into an unacceptably unfair process, and also does not make it acceptably unfair. Especially since Bluesky retains the right to consolidate arbitration claims into a mass arbitration, but does not let potential victims form a class if such a move would be disadvantageous to Bluesky.

If Bluesky wants to protect itself from legal liability, let it do what every company did until just a couple years ago: a) don't break the law on purpose, and; b) buy insurance

These new ToS are an absolute dog's breakfast. I wouldn't click through them.

And luckily, I don't have to! Because, to Bluesky's eternal credit, they have shipped the technical components needed to create a Bluesky server that is a full, first-class participant in the Bluesky service, without its users having to sign up to these Terms of Service (unfortunately, if you're already a Bluesky user, it's too late, because its ToS says you're still bound to mandatory arbitration even if you delete your account).

Legacy social media is in trouble. Facebook and Twitter are thrashing around, using AI finance-theater in a bid to convince investors not to panic-sell their stock because they no longer have any growth left.

A new, federated, independent, web is being born before our eyes, running on Activitypub (Mastodon) and Atproto (Bluesky). This web does not have to fall prey to the enshittifying norms of the zuckermuskian web. If the people building this new web are wise, they will take irrevocable action that will limit their ability (and the ability of their successors) to fall prey to the siren song of enshittification in the future. This is called a "Ulysses pact" – when you tie yourself to the mast so that you don't yield to future temptation.

Putting binding arbitration in your ToS is the opposite of a Ulysses pact: it's ensuring that you – and whoever you are replaced with when your investors decide it's time for a service-level heel turn – always retain the ability to enshittify, should the mood take you.

We can demand something better – and, if you run your own Bluesky server, you can.

My sysadmin, Ken, just took delivery of some new server hardware at his colo, and he's gonna be setting me up my own Mastodon and Bluesky servers in the coming weeks. I'm really looking forward to using the Bluesky service, especially since I can do so without clicking through the Bluesky terms of service or making myself vulnerable to the enshittificatory gambits that future management might assay, because those terms have given them the leeway to do so.

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