Inclusion of forced arbitration in Crunchyroll January 2025 TOS update

On Thursday, January 30th, Crunchyroll emailed US users of its server about an update to its terms of service through email and notifications on login. There were two main updates to the terms of service - a class action-lawsuit waiver, and an update to account usage guidelines. The messaging about these changes did not mention any means of opting out of these changes or give any warning - they are effective as soon as users click continue on the site or continue to use the service.

Background[edit | edit source]

Crunchyroll is a US-based media-streaming platform owned by Sony that specializes in east-asian media. users can opt to pay for different tiers of premium access to animated content. Users have to agree to the terms of service to continue to use the streaming platform.

On January 30th, 2025 users were informed that the terms of use were changing via email and messages upon logging into the site. In order to continue using the service, users would have to agree to the terms even if they were already paid members of the site.

The email users received indicated two vague changes to the terms of service:

"We’ve provided additional details on the use of your account and the guidelines that help keep user accounts safe and sound."
"We’ve updated the procedures for resolving disputes with us."

The email that Crunchyroll sent to its US-based users on 01-30-2025 notifying them of the change of the terms of conditions.

Users may have also received a message when trying to login after the changes to the terms of service. Users are unable to continue to the site without clicking "Continue" to agree to the terms, even if they are a paid member, and are not given an opt-out option.

The notification on Crunchyroll's site for US-based users on 01-30-2025 notifying them of the change of the terms of conditions and requiring them to click continue.

Terms of Service Update - Section 14[edit | edit source]

Upon clicking the terms of use^[1] link provided in the email, the user is greeted with a 23 page legal agreement with no indication of what exactly changed.

Reading into it the user would find that:

By continuing to use the service they agree to all of the terms
They can opt out of section 14, "Dispute Resolution: Arbitration Agreement and Class Action Waiver" by notifying Crunchyroll in writing
Even if they opt out of section 14 of the terms, you cannot opt-out of the specific "Class Action Waiver" section - section d.

The specific statements provided in the terms on these topics are as follows:

"You may opt-out and not be bound by the Arbitration Agreement and Class Action Waiver. To do so, you must notify Crunchyroll in writing no later than thirty (30) days of your acceptance of any update to these Terms of Use or your first use of the Service, whichever is later. Your notice must include your name and address, and the email address you used to set up your Crunchyroll account (if you have one), and an unequivocal statement that you want to opt-out of this arbitration agreement. You must send your opt-out notice to one of the following physical or email addresses: Crunchyroll, LLC., ATTN: Arbitration Opt-out, 444 Bush Street, San Francisco, CA 94108; legal@crunchyroll.com. If you do not opt out, you shall be bound to arbitrate disputes in accordance with the terms of the Arbitration Agreement and Class Action Waiver. If you opt out of the Arbitration Agreement or Class Action Waiver, you or we may exercise your or our right to a trial by jury or judge, as permitted by applicable law, but any prior existing agreement to arbitrate Disputes under a prior version of this Arbitration Agreement will not apply to claims not yet filed. Crunchyroll will continue to honor any valid opt outs if you opted out of arbitration in a prior version of the Arbitration Agreement pursuant to the requirements set forth in that version. If you opt-out of the Arbitration Agreement or Class Action Waiver, Crunchyroll also will not be bound by them. Absent opt out, this Section 14 will survive the termination of your relationship with Crunchyroll."^[1]^[2]

The text about not being able to opt-out of the class-action waiver (section d) is at the end of section f (Arbitration rules):

Opt out of arbitration under this section shall not be construed as opt out of Section 14(d), “Class Action Waiver.” Absent notice of an opt-out, the arbitrations will proceed in the order determined by the sequential numbers assigned to demands in the Mass Filing.^[1]^[2]

There is not a similar note about opting-out of the "class action waiver" in the section titled "Class Action Waiver"

Users were not provided with an easy option to opt-out or an easy-to-review synopsis of changes to the terms.

The end of the terms indicates that anyone can contact Crunchyroll with questions or to obtain a copy:

If you have questions about these Terms of Use or would like to request a copy of these Terms of Use or any other records relating to these Terms of Use or your use of the Site and Services, contact Crunchyroll at feedback@crunchyroll.com or by sending a written request to Crunchyroll, LLC. at 444 Bush Street, San Francisco, CA 94108, Phone: (415) 796-3560.^[1]^[2]

Sony's response[edit | edit source]

Sony has not responded.

Consumer impact[edit | edit source]

On March 1st, 2025, existing users will no longer be able to opt-out and will be required to participate in binding arbitration if a dispute arises between the user and Crunchyroll, without an option to pursue a class-action suit. Users will also be required to reply within 30 days to any future changes to the terms of service with written opt-out of section 14 of the terms of service.