Crunchyroll revised its Terms of Service on Jan 25, 2024, in response to a recent leak of Premium user account credentials.
A user on X had posted a list of usernames and passwords that day, leading to confirmations from some subscribers that their credentials were among those exposed.
Concerns over the security of the streaming service intensified, although Crunchyroll maintained that its systems were not compromised.
Table of Contents
New Eligibility and Registration Clause
The updated Terms of Service now include a new paragraph in the Eligibility and Registration section, emphasizing that the service is strictly for personal use.
The paragraph states that users may not transfer, sell, purchase, or barter their subscriptions. Any attempt to do so, the new clause indicates, is “null and void.” The text also prohibits any fraudulent use of the subscription.
Interestingly, Crunchyroll also has a paragraph in this section which states that users are solely responsible for safeguarding their login credentials. However, this paragraph IS NOT a new addition and has always been there, even before the recent data leak happened.
Changes to Section 13
Crunchyroll replaced its prior language regarding legal jurisdiction with wording that specifies New York state laws will govern any disputes. It was California State Laws in the previous TOS.
Any legal action not brought in arbitration must be pursued exclusively in federal or state courts located in New York, with users consenting to those courts’ jurisdiction.
The new clause reiterates users cannot move a legal dispute to another venue based on convenience.
Overhaul of Section 14: Dispute Resolution and Class Action Waiver
The service’s arbitration policy underwent significant restructuring in Section 14. Under these changes, the company instituted a multi-step dispute resolution process:
- Informal Negotiation: Users and Crunchyroll must attempt to resolve any dispute through informal discussions before resorting to arbitration.
- Mandatory Arbitration: If informal resolution is unsuccessful, disputes typically proceed to binding arbitration, with limited exceptions (such as claims involving intellectual property rights or small claims court actions).
- Class Action Waiver: Users are barred from engaging in class or representative actions. Any arbitration must proceed on an individual basis. The new clause allows for “consolidation” of claims only if Crunchyroll specifically consents in writing. If the Class Action Waiver is deemed invalid, the entire arbitration agreement would be rendered void.
The updated terms also describe “batch arbitration” procedures in the event of multiple similar arbitration demands. Parties involved must address claims in organized batches, with one set of demands being processed at a time.
If mediation with a court-appointed mediator fails for the first batch, either Crunchyroll or the claimants may opt out of arbitration altogether.
Possible Legal Ramifications of the Updates
These revisions mean that Premium subscribers affected by the Jan 25 account credential leak are largely restricted to pursuing individual claims through the arbitration process, if at all they want to pursue any claim.
The Class Action Waiver indicates that, unless deemed unenforceable, users cannot collectively file class-action lawsuits against Crunchyroll related to the leak.
Should a court find any key portion of the Class Action Waiver invalid, the broader arbitration requirement would not apply, opening the possibility of legal claims proceeding in court.
The modifications further reinforce that disputes must be filed and heard under New York law, and users must consent to the jurisdiction of courts in New York, New York, if a dispute falls outside mandatory arbitration.
This reflects a shift from Crunchyroll’s previous Terms of Service, which mentioned courts in California or New York without the expanded arbitration protocols now outlined.
Source: Crunchyroll
For those looking to understand Crunchyroll’s Terms of Service, please consult a lawyer. The article is in no way responsible for how you interpret or understand the subject matter.
These changes to the ToS would not apply to what happened with the January 25th credentials leak. The incident happened before the changes and they cannot change the governing contract for that incident after the fact.
These changes to the ToS would not apply to what happened with the January 25th credentials leak. The incident happened before the changes and they cannot change the governing contract for that incident after the fact.