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1491520cookie-checkPatreon Loses Lawsuit Costing The Company Millions
2 August 2020

Patreon Loses Lawsuit Costing The Company Millions

If you haven’t been following the news, as reported on, here is a quick recap of events that have lead to Patreon losing a court battle and now being forced to enter into arbitration with over a hundred backers: This all started when Patreon decided to deplatform conservative comedian Owen Benjamin.

Benjamin suggested his fans sue/enter arbitration with Patreon for banning him from the platform without him violating any of their terms of service. Over one hundred of his fans took up the cause and moved to begin arbitration when Patreon refused and took them to court to prevent any arbitration from occurring.

After a series of filings, Patreon attempted to intimidate the claimants by counter-suing them. Throughout litigation, all of Patreon’s motions were thrown out, including an attempt to apply new terms of service against the claimants retroactively.

“You may not bring a claim against us for suspending or terminating another person’s account, and you agree you will not bring such a claim. If you try to bring such a claim, you are responsible for the damages caused, including attorneys fees and costs. These terms remain in effect even if you no longer have an account.”

Patreon ran into two problems with this change. In relevancy to the case, under the law, only terms active at the time are applied to any deliberation. This is good as it means the government cannot retroactively make you a criminal and then prosecute you for doing something that was legal at the time you did it. For Patreon and other corporations, this means they can’t redefine their terms of service to get out of litigation or arbitration.

Secondly, in the long term, this revision means Patreon has removed any capacity of users – be they creators or subscribers  – to have remediation against Patreon’s decisions. In the realm of politics, this is the equivalent of the government seizing assets, land, or businesses and telling you to go pound sand. Without security, people withdraw their investments from nations and platforms. Time, effort, and social interaction are all investments that Patreon has signaled they can and will take away without remedy. Sending reverberations through the creator community, who increasingly views Patreon as a liability.

If they survive the incoming arbitration, they are unlikely to survive the flight of talent and backers.

As no surprise, the Judge rebuked Patreon’s retractive enforcement of terms of service. Resulting in the company being ordered to undergo arbitration with over a hundred backers. In California, arbitration costs upward of $10,000 per instance, and that is before the arbitration concludes.

During the arbitration, it can be ruled Patreon did engage in tortious interference, and the claimants can be awarded damages and punitive damage. The latter being extra money awarded to disincentivize others from carrying out similar actions.

At minimal, Patreon is looking to lose over a million dollars in setting up the arbitration and millions in legal fees to have their lawyers arbitrate on their behalf. Indeed, this is damning for the company; it will be unlikely to bring the company to its knees unless substantial sums are awarded during the arbitration.

Like any converged company, until Patreon goes fully broke, do not expect this to alter their ongoing censorious behaviors.

(Thanks for the tip: Kyoji Shirakani)

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