I first learned of the legal problems of Patreon via a tweet stream from California based Lawyer, Mike Cernovich. He reported on this case from a hearing over an injuction being sought by Patreon AGAINST their former customers.
Update: Patreon lost.— Cernovich (@Cernovich) July 30, 2020
The judge applied well-established law and denied Patreon's motion / sided against them in their lawsuit against Owen Benjamin fans.
Patreon will now be forced to arbitrate 100+ claims, and pay up front fees of up to $10,000 per arbitration. https://t.co/z7WoPBjWa7
For the background, this is a good summary from Cernovich:
Patreon, a platform popular with podcasts, journalists, and comedian faces significant legal peril due a fascinating quirk of California law that no one seemed to have noticed.
Summary: Patreon banned Owen Benjamin. Owen Benjamin’s backers moved for arbitration, alleging various causes of action. Under the arbitration procedures spelled out in Patreon’s Terms of Service, Patreon must pay the filing fees, which could total millions of dollars. Patreon cannot collect those fees back, even if Patreon wins the arbitrations.
After watching a bunch of videos analysing this issue I figured out who was actually responsible for this strategy. What can I say, I'm somewhat obsessed with watching YouTube lawyers like Viva Frei, Lawful Masses and Rekieta Law. I also listened to Sargon of Akkad's take because he, along with Lauren Southern, were the two creators I knew who both got taken down in Patreon's purges of wrong think. Both of them have audiences that dwarf Owen Benjamin.
So who's really running this strategy? Vox Day. And he has correctly identified the same arrogant problem which drives our #CryptoClassAction against big tech:
The way the whole situation has evolved is rather interesting. For generations, companies have understood very clearly that they had to maintain positive relationships with their customers in order to stay in business. Hence the outmoded corporate doctrine that "the customer is always right".
However, the combination of practical monopolies and the venture-to-IPO model has tended to sever the historical link between the consumer and the corporation, to the point that many technology companies no longer depend upon their consumers for their operating income. To the contrary, they have transformed consumers into users that are nothing more than raw material for their real customers. This is why they simply don't possess a culture of giving a damn about their users, let alone harboring any regard for a single user they don't like for one reason or another.
Businesses, which must make a profit to survive, are not immune to this tendency. Though they have exogenous criteria for success, it is a difficult task to propagate the objective criteria for success down through the ranks – at each level of decision making there will be some degree of subjectivity, and by the time we reach the bottom rank, decisions might be completely Modian. But in the business world, there is some good news for Mundians: those businesses that become too Modian will fail.
Because Patreon feels insulated from the actual people who pay the money which keeps it afloat, their Modian attempt to run a business in the real Mundian world of profit and loss, is looking shaky. Get woke, go broke.
A fascinating aspect of this case is how the far-left aligned media like the Daily Dot will write any old crap about this case:
Now Patreon is suing 72 of his fans.
“This lawsuit is about keeping hate speech off of Patreon,” the company told the Daily Dot via email. “We won’t allow former users to extort Patreon, and are moving these frivolous claims to court where they belong.”
Unlike the prior claims, the suit against Benjamin’s fans is filed in California state court.
That was when Patreon tried to sue. They've just had to add this to their article:
Update 8:35am CT, July 31: On July 30, Patreon lost the suit in California state court. The claims will now be arbitrated individually.
I.e. the rest of the article which remains above it, with a mocking and derisive tone, is completely wrong.
Vox Day, who still has a YouTube Channel is smart enough to have done the numbers on Patreon. They don't come anywhere close to making money, they employ over 200 people and occupy a large chunk of very expensive real estate. This case will bleed them out and if even a fraction of Lauren Southern's or Sargon of Akkad's fans chose to pay up $250 and ask for arbitration, they're dead.
This case has some echoes of our giant Crypto Class Action but it is fundamentally different in one respect. The legal costs in our case won't be the danger for Facebook, Google and Twitter, it will be paying the direct damages they have cost the crypto industry.