Court Denies Vimeo's Motion to Compel Arbitration of Purported Class Action Claims Under Illinois Biometric Information Privacy Act

Vimeo Inc. sought to compel arbitration of putative class claims brought by Bradley Acaley relating to the use of Magisto, a video creation app. Acaley claimed that the app's use of face-geometry scan technology violated the Illinois Biometric Information Privacy Act (BIPA). The app's terms of service included a clause providing for binding arbitration of "all disputes, controversies and claims." However, the terms also provided an "exceptions to arbitration" clause, which excepted claims "related to, or arising from, allegations of ... invasion of privacy."

Acaley first argued that no valid agreement to arbitrate existed because he never "assented to the terms of service." "Illinois contract law requires that a website provide a user reasonable notice that his use of the site or click on a button constitutes assent to an agreement." To determine whether a user has received reasonable notice, courts ask "whether the web pages presented to the user adequately communicated all the terms and conditions of the agreement, and whether the circumstances support the assumption that the user received reasonable notice of those terms." Although the notice was in smaller font and partially obscured at times by pop-up windows, the court found that Acaley received sufficient reasonable notice from the app's welcome page, which stated, "By continuing I agree to the terms," where the word "terms" provided a hyperlink to the terms of service. In addition, a second webpage displayed in "smaller but still conspicuous font" the statement, "By starting you agree to our terms and privacy policy." As such, the parties had formed a valid arbitration agreement.

The court found, however, that Acaley's claims for invasion of privacy were clearly excepted from the agreement to arbitrate. The court determined that violations of BIPA constitute an "invasion of privacy" as that term was used in the arbitration agreement and that the exception applied to such claims brought by either party, not just Vimeo. Therefore, the court concluded "with positive assurance" that the arbitration agreement did not apply to Acaley's BIPA claim and refused to compel arbitration.

Acaley v. Vimeo, Inc., No. 1:19-cv-07164 (N.D. Ill. June 1, 2020).