California Supreme Court rules that online businesses like Square can be sued for discrimination in their TOS, even if a user never signed up for the service
Context & Ripple Effects
This ruling lands on top of a decade-long arc in which California courts have been defining what terms of service actually do. A federal appeals court already held that online ToS bind users whether or not they read them, no matter how long companies like Uber make the documents — enforceability was settled in companies' favor.
What changed today is the direction of exposure: the same court system that made unread terms binding has now ruled that those terms can themselves be the basis of a discrimination claim, against a business like Square, by someone who never agreed to them at all. It extends the logic of the Tinder Plus age-pricing discrimination suit from a signed-up user to the general public.
First-order effects
- Square and comparable online businesses now face potential discrimination litigation over their terms of service from people with no account relationship, expanding the pool of potential plaintiffs well beyond customers.
Second-order effects
- Platforms will re-audit TOS language for discriminatory effects — pricing tiers, eligibility rules, access conditions — because the document itself is now a liability surface, not just a contract shield.
Third-order effects
- If the pattern holds, California's high court is assembling a de facto national framework for platform governance: terms are binding on users who never read them (the 2017 appeals court line) yet challengeable by non-users who never signed them, forcing companies to write TOS as public-facing policy rather than private contract.
The trend: Courts are converting terms of service from one-sided corporate shields into two-way legal instruments that platforms can be held to by anyone they affect.