Executive Summary
When platform market dominance combines with pre-dispute mandatory arbitration, the result is structural immunity: a collapse in conversion rates across the dispute pipeline such that systematic, low-dollar harms become non-justiciable regardless of merit. The term is operational rather than moral. It describes system outputs, not actor intentions, and a system can produce structural immunity without anyone intending it.
The paper models suppression as six filters (awareness failure, rational apathy, information asymmetry, mandatory arbitration friction, class action waiver, and regulatory capture), each of which independently suppresses a fraction of surviving claims. The compound survival rate is the product of all pass-through rates.
Calibrating against CFPB data, 600 observed filings from 80,000 expected claims, gives a baseline survival rate of 0.75%. Under realistic parameters for consumer finance, rational apathy alone suppresses 99.1% of claims, and the compound survival rate is 0.002%: 2 claims from 80,000 harmed consumers.
Key Contributions and Methodology
The primary contribution is treating complaint suppression as a multiplicative pipeline rather than an additive list of barriers. Because the filters multiply, removing any single one improves survival by at most 108x (from 0.002% to 0.27%), while the remaining five still block 99.7% of claims. Reaching even 10% survival requires dismantling three or more filters at once. This explains why decades of piecemeal reform have failed to restore access to adjudication.
The model is extended to the gig economy, social media, and healthcare. The dominant filter varies by sector: rational apathy where per-unit harm is low (consumer finance, social media), class action waivers where harm is high but claims benefit from aggregation (gig economy), and information asymmetry where claims are individually viable but procedurally opaque (healthcare). The optimal intervention targets the dominant filter first.
The paper traces the doctrinal path through AT&T Mobility v. Concepcion (2011), American Express v. Italian Colors (2013), and Epic Systems v. Lewis (2018), and examines Heckman v. Live Nation (9th Cir. 2024) as a limit on immunity. The No Surprises Act is analyzed as a reform that addressed several filters at once and produced a measurable, though still insufficient, increase in dispute resolution.
Key Findings
- Six-filter pipeline: awareness, rational apathy, information asymmetry, arbitration friction, class action waiver, and regulatory capture compound multiplicatively
- CFPB calibration: 600 filings from 80,000 expected claims, a 0.75% baseline survival rate; 0.002% under realistic consumer-finance parameters
- Single-filter reform is insufficient: removing any one filter leaves 99.7% of claims blocked
- Multi-filter threshold: 10% survival requires removing three or more filters simultaneously
- Sector-specific dominant filters: rational apathy, class action waivers, or information asymmetry depending on the industry
- No intent required: the architecture produces immunity through ordinary contract terms and procedures
Key References
563 U.S. 333. Supreme Court of the United States.
584 U.S. 497. Supreme Court of the United States.
Arbitration Study: Report to Congress, pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act § 1028(a).
Arbitration with Uninformed Consumers. Review of Economic Studies, 92(6), 3888-3923.
Diffusing Disputes: The Public in the Private of Arbitration, the Private in Courts, and the Erasure of Rights. Yale Law Journal, 124(8), 2804-2939.