IN THE SUPREME COURT OF BRITISH COLUMBIA  
Citation:  
Petty v. Niantic Inc.,  
2022 BCSC 1077  
Date: 20220627  
Docket: S213723  
Registry: Vancouver  
Between:  
And  
Sharise Petty and David Stasch  
Plaintiffs  
Niantic Inc., Warner Bros Entertainment Inc.  
Warner Bros Entertainment Canada Inc., and  
Warner Bros Home Entertainment Inc.  
Defendants  
Before: The Honourable Justice Mayer  
Reasons for Judgment  
Counsel for the Plaintiffs:  
M. Good  
S. Jaworski  
S. Turner  
Counsel for the Defendant, Niantic Inc:  
N.S. Rabinovitvh  
E. Irving  
Counsel for the Defendants, Warner Bros  
Entertainment Inc., Warner Bros  
Entertainment Canada Inc., and Warner  
Bros Home Entertainment Inc.  
J.M. Sullivan, Q.C.  
R.L. Reinertson  
K. Russell  
Place and Date of Trial/Hearing:  
Place and Date of Judgment:  
Vancouver, B.C.  
April 6–7, 2022  
Vancouver, B.C.  
June 27, 2022  
Petty v. Niantic Inc.  
Page 2  
Table of Contents  
INTRODUCTION ....................................................................................................... 3  
BASIS OF THE DEFENDANTS’ STAY APPLICATION............................................ 4  
ISSUES...................................................................................................................... 6  
DOES THE ACPA INVALIDATE OR PROHIBIT THE ARBITRATION  
AGREEMENT?.......................................................................................................... 8  
Analysis – Enforcement of the Arbitration Agreement under the ACPA ................. 9  
IS THE ARBITRATION AGREEMENT NULL, VOID, INOPERATIVE OR  
INCAPABLE OF BEING PERFORMED FOR REASONS OF  
UNCONSCIONABILITY OR PUBLIC POLICY? ..................................................... 12  
Legal Overview - Unconscionability and Public Policy ......................................... 13  
Analysis - Inequality in Bargaining Power ............................................................ 16  
Analysis - Improvident Bargain............................................................................. 18  
Analysis - Public Policy ........................................................................................ 24  
ARBITRATORS’ JURISDICTION TO DETERMINE CLAIMS UNDER THE  
COMPETITION ACT................................................................................................ 26  
Analysis................................................................................................................ 28  
CONCLUSION......................................................................................................... 31  
Petty v. Niantic Inc.  
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INTRODUCTION  
[1]  
In this application the defendants Niantic Inc., Warner Bros Entertainment  
Inc., Warner Bros Entertainment Canada Inc. and Warner Bros Home Entertainment  
Inc. seek an order staying this class proceeding, other than in respect of the relief  
sought by the plaintiff Sharise Petty under the Business Practices and Consumer  
Protection Act, S.B.C. 2004, c. 2 [BPCPA].  
[2]  
This class proceeding is brought by the representative plaintiffs, Ms. Petty  
and David Stasch on behalf of, respectively, residents of British Columbia and  
Alberta who were customers of the defendants that purchased or otherwise paid  
directly or indirectly for “loot boxes” in the defendants’ video games. A loot box is  
described by the plaintiffs as a game of chance inside a video game in which a  
player pays for the chance to win virtual awards, which in some cases can be sold.  
The plaintiffs allege that the loot boxes within the games are an unlicensed, illegal  
gaming system under Canadian law.  
[3]  
The plaintiffs seek damages against the defendants for, amongst other things,  
unjust enrichment and those arising from breaches of the Competition Act, R.S.C.  
1985, c. C-34, the BPCPA, Alberta Consumer Protection Act, R.S.A. 2000, c. C-26.3  
[ACPA], and the Infants Act, R.S.B.C. 1996, c. 223.  
[4]  
Warner Bros Entertainment Inc. is a Delaware company that produces and  
commercializes content, including game content through its subsidiaries and  
affiliates. Warner Bros Entertainment Canada Inc. is an Ontario company that  
markets and distributes physical games in Canada. Warner Bros Home  
Entertainment Inc. is a subsidiary of Warner Bros Entertainment Inc. and its home  
entertainment distribution division. Through its subsidiary WB Games Inc., Warner  
Bros Home Entertainment Inc. develops, publishes and distributes games. The  
Warner Bros defendants are referred to collectively in these reasons as the “Warner  
Defendants”.  
[5]  
Niantic Inc. (“Niantic”) is a Delaware company that develops and publishes  
interactive games that can be played on mobile phones. Niantic is the developer and  
 
Petty v. Niantic Inc.  
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publisher of a game called Pokémon Go. Niantic and the Warner Defendants are the  
co-developers of the game Harry Potter: Wizards Unite, and Niantic is the publisher  
of record for this game.  
[6]  
Ms. Petty, a British Columbia resident, alleges that between July 2018 and  
the present she paid approximately $450 to purchase Pokécoins in order to  
purchase loot boxes and other items in the game Pokémon Go. David Stasch, an  
Alberta resident, alleges that between July 2016 and the present he paid  
approximately $2,115.77 to purchase Pokécoins for the same purpose.  
BASIS OF THE DEFENDANTS’ STAY APPLICATION  
[7]  
The defendants seek a stay on the basis that both plaintiffs agreed to be  
bound by the applicable terms of service, being Niantic’s terms of service for the  
games (the “Terms of Service”), which require that disputes regarding services  
provided by the defendants must be resolved by binding arbitration. The defendants  
contend that, with the exception of the relief sought by Ms. Petty under s. 172 of the  
BPCPA, the arbitration provision within the Terms of Service is valid and  
enforceable.  
[8]  
The defendants say that the Terms of Service apply to all aspects of a user’s  
gaming experience with Pokémon Go and Harry Potter: Wizards Unite, including use  
of mobile game applications, purchase of merchandise and use of other products  
and services (the “Services”).  
[9]  
The Terms of Service provide as follows:  
Terms  
[…]  
By using the Services, you are agreeing to these Terms. If you don’t agree to  
these Terms, you may not use the Services. Niantic may modify these Terms  
at any time, and if we do, we will notify you by posting the modified Terms on  
the Site or in the App. It’s important that you review any modified Terms  
before you continue using the Services. If you continue to use the Services,  
you are bound by the modified Terms. If you don’t agree to bound by the  
modified Terms, then you may not use the Services.  
[…]  
 
Petty v. Niantic Inc.  
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[10] The Terms of Service include a mandatory arbitration agreement (the  
“Arbitration Agreement”) that applies to any dispute arising from use of the games.  
Section 13 reads in material part, as follows:  
13. Dispute Resolution  
YOU AGREE THAT DISPUTES BETWEEN YOU AND NIANTIC WILL BE  
RESOLVED BY BINDING, INDIVIDUAL ARBITRATION, AND YOU ARE  
WAIVING YOUR RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE AS  
A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS ACTION  
OR REPRESENTATIVE PROCEEDING.  
[…]  
13.1 Arbitration  
If you live in the US or another jurisdiction which allows you to agree to  
arbitration, you and Niantic agree that any disputes will be settled by binding  
arbitration, except that each party retains the right: (a) to bring an individual  
action in small claims court and (b) to seek injunctive or other equitable relief  
in a court of competent jurisdiction to prevent the actual or threatened  
infringement, misappropriation, or violation of a party’s copyrights,  
trademarks, trade secrets, patents or other intellectual property rights […]  
Without limiting the preceding paragraph, you will also have the right to  
litigate any other dispute if you provide Niantic with written notice of your  
desire to do … within thirty (30) days following the date you first accept these  
Terms (Such notice, an Arbitration Opt-out Notice”).  
[…] The arbitrator, and not any court or agency, shall have exclusive authority  
to (a) determine the scope and enforceability of this arbitration agreement  
and (b) resolve any dispute related to its interpretation, applicability,  
enforceability, or formation including any claim that all or any part of it is void  
or voidable.  
[…]  
13.4 Arbitration Location and Procedure  
Unless you and Niantic otherwise agree, the arbitration will be conducted in a  
confidential manner, in the country where you reside. If your claim does not  
exceed $10,000, then the arbitration will be conducted solely on the basis of  
the documents that you and Niantic submit to the arbitrator, and there will be  
no other discovery conducted (such as depositions), unless the arbitrator  
determines that a hearing is necessary. …  
[11] Other relevant terms are as follows:  
a. Section 13.2 provides that arbitration is administered by the American  
Arbitration Association (“AAA”) under its commercial arbitration rules, with  
certain modifications;  
Petty v. Niantic Inc.  
b. Section 13.5 provides that Niantic has agreed to waive its rights for  
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attorney fees if it prevails in an arbitration but if the game user prevails,  
they are entitled to their attorney’s fees;  
c. Section 13.6 provides that the Terms of Service are governed by  
California law and that to the extent the Terms of Service permit a party to  
initiate litigation in a court, other than for small claims actions, the parties  
agree to the exclusive jurisdiction of the courts located in the Northern  
District of California; and  
d. Section 13.7 provides that if a game user’s claim for damages does not  
exceed $75,000 that Niantic will pay any filing, administrative or arbitrator  
fees – unless the arbitrator finds that a claim was frivolous, or brought for  
an improper purpose.  
[12] The plaintiffs commenced this action by notice of civil claim filed on April 14,  
2021.  
[13] None of the defendants have filed a response to civil claim or taken  
substantive steps in the proceeding – other than to file jurisdictional responses  
disputing this Court’s jurisdiction. Although the defendants’ pleadings also contend  
that this Court lacks the territorial jurisdiction to hear this class proceeding, only the  
enforceability of the Arbitration Agreement is at issue in this application.  
ISSUES  
[14] For the purposes of this application the plaintiffs have conceded that they  
entered into the Terms of Service with the defendants that included the Arbitration  
Agreement.  
[15] The International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 [ICAA]  
applies in this case as the parties have their places of business in different states  
and the dispute arises out of a relationship of a commercial nature: ICAA, ss. 1(3)  
and 1(6).  
 
Petty v. Niantic Inc.  
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[16] Section 8(1) of the ICAA provides that “if a party to an arbitration agreement  
commences legal proceedings in a court against another party to the agreement in  
respect of a matter agreed to be submitted to arbitration, a party to the legal  
proceedings may, before submitting the party’s first response on the substance of  
the dispute, apply to that court to stay the legal proceedings”. Section 8(2) provides  
that this Court shall “make an order staying the legal proceedings unless it  
determines that the arbitration agreement is null and void, in operative or incapable  
of being performed”.  
[17] The applicant’s burden on an application for a stay in favour of arbitration is  
low and only an arguable case that the arbitration agreement applies is required:  
Clayworth v. Octaform Systems Inc., 2020 BCCA 117 at paras. 21–23.  
[18] The parties agree that the three prerequisites for a stay of proceedings in  
favour of arbitration are met. All parties agree that they are party to an agreement  
that contains an arbitration clause and that these proceedings relate to a matter that  
falls within the scope of the arbitration provision and that the stay application is  
brought in a timely manner: see Prince George (City) v. McElhanney Engineering  
Services Ltd. (1995), 9 B.C.L.R. (3d) 368 (C.A.) at 375.  
[19] The defendants contend that, other than in respect of the plaintiffs’ claims  
under s. 172 of the BPCPA, a stay should be ordered1.  
[20] The plaintiffs contend, and therefore the issues to be determined in this  
application include, as follows:  
a. That s. 16 of the ACPA invalidates or prohibits the Arbitration Agreement  
applying to the claim advanced by Mr. Stasch and other Albertans;  
1 The concession of the defendants that a stay is not available for the BCPA claims is in accordance  
with the decision of the Supreme Court of Canada in Seidel v. Telus Communications Inc, 2011 SCC  
15.  
Petty v. Niantic Inc.  
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b. That the Arbitration Agreement is null, void, inoperative or incapable of  
being performed for reasons of public policy and unconscionable pursuant  
to the decision of the Supreme Court of Canada in Uber Technologies Inc.  
v. Heller, 2020 SCC 16 [Uber]; and  
c. That under the Terms of Service containing the Arbitration Agreement, an  
arbitrator lacks jurisdiction to determine the claims brought under the  
Competition Act.  
DOES THE ACPA INVALIDATE OR PROHIBIT THE ARBITRATION  
AGREEMENT?  
[21] The prohibition against enforcement of arbitration clauses in consumer  
transactions or an arbitration agreement with consumers, and the exceptions to this  
prohibition, is set out in s. 16 of the ACPA which reads as follows:  
Arbitration clause, agreement  
16(1) Subject to subsection (3), a supplier shall not enforce an arbitration  
clause in a consumer transaction or an arbitration agreement with a  
consumer.  
(2) Subject to subsection (3), an arbitration clause in a consumer  
transaction or an arbitration agreement with a consumer is void and  
unenforceable.  
(3) Subsections (1) and (2) do not apply in respect of  
(a) an arbitration agreement voluntarily entered into between a  
supplier and a consumer after a dispute has arisen, or  
(b) an arbitration agreement or an arbitration clause in a consumer  
transaction if the agreement or clause allows the consumer to decide,  
after a dispute has arisen, whether the consumer will use arbitration  
or an action in court to resolve the dispute.  
[22] The plaintiffs contend that s. 16(2) of the ACPA invalidates or prohibits  
arbitration in consumer contracts like the one at issue involving Mr. Stasch and other  
Alberta residents.  
[23] The defendants contend that prima facie the exception at s. 16(3)(b) applies.  
They submit that the Arbitration Agreement expressly provides that users may  
choose whether to commence an action in small claims court or to resolve a dispute  
 
Petty v. Niantic Inc.  
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through arbitration. They point out that ss. 13 and 14 of the ACPA permits consumer  
claims of up to $50,000 in the Alberta small claims court, plus interest and costs.  
[24] The plaintiffs contend that the choice in the Arbitration Agreement, to arbitrate  
or submit a dispute to a small claims court, is illusory “given the wording and  
formatting of the Terms of Service”. They contend that the text in the Arbitration  
Agreement stipulating binding arbitration, which they note is the only bolded and  
uppercase text in the agreement, does not suggest that consumers have a choice to  
allow either use arbitration or commence an action in court. In addition, the plaintiffs  
contend that limiting a claimant’s choice of court to only in small claims court is  
unconscionable insofar as it perpetuates the inequality of bargaining power by  
precluding fulsome documentary and oral discovery.  
[25] The defendants contend that in the absence of expert evidence this Court is  
unable to determine whether as a matter of Alberta law the Arbitration Agreement is  
unenforceable with respect to claims by Alberta residents. They say that absent  
expert evidence on Alberta law this Court must apply British Columbia law, which  
does not have a provision equivalent to s. 16 of the ACPA: see RDA Film  
Distribution Inc. v. British Columbia Trade Development Corp., [1999] B.C.J.  
No. 1516 (S.C.), at para. 201, rev’d on other grounds 2000 BCCA 674. The plaintiffs  
contend that expert evidence on Alberta law is not required.  
[26] Finally, the defendants say that even if expert evidence on Alberta law had  
been provided concerning the enforceability of the Arbitration Agreement, under the  
competence-competence principle (which I will discuss further below) this raises a  
complex issue of mixed fact and law which should be decided by an arbitrator in the  
first instance and not this Court.  
Analysis – Enforcement of the Arbitration Agreement under the ACPA  
[27] I will first address the parties’ arguments with respect to the requirement for  
expert evidence on Alberta law – and in particular whether the exception to the non-  
enforceability of arbitration clauses/agreements set out at s. 16(3)(b) of the ACPA  
applies in this case.  
 
Petty v. Niantic Inc.  
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[28] The plaintiffs correctly point out that s. 24(2)(d) of the Evidence Act, R.S.B.C.  
1996, c. 124, requires that this Court take judicial notice of, amongst other laws, all  
acts and ordinances of the legislature of a province. The plaintiffs contend that this  
creates an exception to the general rule that foreign law is a factual matter which  
must be proven by a properly qualified expert.  
[29] In Seidel v. Telus Communications Inc., 2008 BCSC 933, the plaintiff argued  
that evidence from a Quebec lawyer dealing with arbitrations and class actions was  
inadmissible because the court was qualified to consider Quebec law without  
additional help. The chambers judge, Justice Masuhara, noted that s. 24(2) of the  
Evidence Act is an exception to the general rule regarding admissibility of evidence  
of foreign law, displacing the common law requirement of proving the foreign law as  
a question of fact – but stated that this conclusion is not a complete answer: Seidel  
at para. 20.  
[30] Justice Masuhara reasoned as follows:  
[22]  
The answer lies in the conclusion that there is a difference between  
taking judicial notice of the fact that a statute exists and its prima facie  
content, and ascertaining the true meaning and effect of that statute. The  
former is intended by s. 24(2) of the [Evidence Act] (as well as s. 17 of the  
[Canada Evidence Act]) for the sake of judicial expediency to avoid formal  
introduction of unnecessary and irrelevant evidence. Where a law is enacted  
and officially published, a court’s time would be wasted in requiring the  
parties to adduce the evidence of such law and then allowing a cross-  
examination on this evidence.  
[23]  
However, the law is more than just the text of the statute. This is a  
trite principle of law in the common law jurisdictions as statutes are  
interpreted and augmented by precedent. […]  
[24]  
It would be audacious of me to conclude that simply because I can  
read the translations of the provisions of the Civil Code I have the capacity to  
fully understand and interpret the meaning of such provisions. In other words,  
this is information that is “outside of the experience the trier of fact”, which  
makes expert evidence necessary.  
[Emphasis added.]  
[31] In summary, Masuhara J. found that a distinction should be made between  
the court taking judicial notice of the existence of an extra-provincial statute pursuant  
to s. 24(2) of the Evidence Act and interpreting the meaning and effect of the extra-  
Petty v. Niantic Inc.  
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provincial statute, which may require expert evidence to assist in interpreting the  
statute.  
[32] On its face the exceptions to the prohibition against arbitrations clauses or  
agreements in the ACPA apply.  
[33] The plaintiffs have not demonstrated that the exception in s. 16(3)(b), which  
applies where an arbitration agreement or clause allows the consumer to decide  
whether to proceed by way of arbitration or “an action in court”, does not apply in this  
case. I note that the ACPA does not specify whether such a choice must include any  
court – that is, both the Alberta Provincial Court and Court of Queen’s Bench of  
Alberta. If the statutory choice of commencing “an action in court” includes both,  
then arguably the Arbitration Agreement, which limits the consumers’ choice to small  
claims court or arbitration is not compliant with s. 16(2) of the ACPA. In my view  
expert evidence on Alberta law interpreting the true meaning and effect of “action in  
court” is required. This is consistent with the reasoning of Masuhara J. in Seidel.  
[34] Next, I do not consider that the fact that bold and upper-case text is used at  
Article 13 of the Arbitration Agreement, which states that arbitration is mandatory,  
makes the choice provision at Article 13.1, allowing a consumer to choose between  
arbitration and small claims court, illusory. The Arbitration Agreement must be read  
in its entirety. As the defendants point out, the use of bold and uppercase characters  
to draw attention to a particular clause is not an interpretive aid which the court can  
rely upon in determining the terms of an agreement.  
[35] Finally, even if I assume that the choice to proceed to small claims court  
satisfies the exception in s. 16(3)(b), I do not find that the plaintiffs have provided a  
basis for a finding that the choice to commence an action in that court is not a real  
choice for the plaintiffs or will not provide them with access to justice. The small  
claims limit in Alberta is $50,000. In this case Mr. Stasch’s claim is approximately  
$2,115.77, well within the prescribed limit. In addition, contrary to the plaintiffs’  
submissions that Mr. Stasch’s right to fulsome documentary and oral discovery  
would be circumscribed in a small claims court proceeding, the defendants point out  
Petty v. Niantic Inc.  
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that under Alberta law oral and document discovery is available: see for example:  
Provincial Court Civil Procedure Regulation, Alta Reg 176/2018, s. 15; Provincial  
Court Act, R.S.A. 2000, c. P-31, s. 8; Alberta Small Claims Pre-Trial Conference  
Notice.  
[36] In conclusion, for the reasons set out above, I do not find that the plaintiffs  
have shown that the ACPA invalidates or prohibits the Arbitration Agreement  
applying to the claim advanced by Mr. Stasch and other Albertans.  
IS THE ARBITRATION AGREEMENT NULL, VOID, INOPERATIVE OR  
INCAPABLE OF BEING PERFORMED FOR REASONS OF  
UNCONSCIONABILITY OR PUBLIC POLICY?  
[37] The plaintiffs rely primarily on the decisions of the Supreme Court of Canada  
in Uber and the British Columbia Court of Appeal in Pearce v. 4 Pillars Consulting  
Group Inc., 2021 BCCA 198, in support of their position that the Arbitration  
Agreement should not be enforced by virtue of the common law doctrine of  
unconscionability and for reasons of public policy.  
[38] Uber involved a proposed class action by drivers of Uber who alleged that the  
company’s terms and conditions violated Ontario’s Employment Standards Act,  
2000, S.O. 2000, c. 41. Uber’s standard form agreement with its drivers included a  
mandatory arbitration clause under the rules of the International Chamber of  
Commerce. The governing law was the law of the Netherlands and the place of  
arbitration was Amsterdam.  
[39] Pearce involved a case in which the defendants were involved in the debt  
restructuring business. The plaintiff brought a proposed class action seeking  
damages and a restoration of fees paid in contravention of the BPCPA. The  
chambers judge (the writer) dismissed a stay of proceedings application on the basis  
that the class action waiver clause, in which the contracting parties agreed not to  
participate in a class action, was unconscionable. The chambers decision was  
upheld by the Court of Appeal, who also found that the class action waiver clause  
was contrary to public policy: Pearce at para. 184  
 
Petty v. Niantic Inc.  
Legal Overview - Unconscionability and Public Policy  
Page 13  
[40] As a starting point, courts will typically seek to enforce agreements freely  
entered into between relatively equal, consenting parties. As was stated in Pearce:  
[195] Two important presumptions support the doctrine of freedom to  
contract. First, the presumption that contracting parties are best situated to  
assess and protect their interests while bargaining. Second, the presumption  
that the contracting parties are relatively equal, and thus any contract is  
negotiated and agreed upon, and therefore fair: Uber at 56.  
[…]  
[197] Where [the traditional presumptions underlying freedom of contract]  
are not true, however the doctrine of unconscionability is available.  
[41] As explained in the decision in Pearce, the concepts of unconscionability and  
public policy are separate but doctrinal cousins. Unconscionability focusses on the  
vulnerability of the weaker party and unfairness of a contract or one of its terms.  
Public policy focusses on harm to society from enforcing a particular contract or one  
of its terms: Pearce at paras. 192,193.  
[42] As stated by the Supreme Court in Uber “unconscionability is an equitable  
doctrine that is used to set aside “unfair agreements [that] resulted from an  
inequality of bargaining power …”: Uber at para. 54.  
[43] There are two requirements for a finding that a bargain is unconscionable.  
There must be an inequality of bargaining power and the bargain itself must be  
improvident. Both of these elements must be proven by the party claiming  
unconscionability: Pearce at para. 200.  
[44] The majority in Uber held that an “inequity of bargaining power exists when  
one party cannot adequately protect their interests in the contracting process”: Uber  
at para. 66.  
[45] Examples of situations where an inequity in bargaining power may exist  
include the following: “necessity cases”, in which a weaker party is so dependent on  
the stronger that serious consequences flow from not agreeing to a contract; where  
a party is vulnerable due to financial circumstances; where there is a special  
 
Petty v. Niantic Inc.  
Page 14  
relationship of trust; and where only one party is able to understand and appreciate  
contractual terms at issue: Pearce at paras. 202 - 203.  
[46] The focus in these situations is on whether one party to a contract is  
vulnerable to exploitation in the contracting process. What matters is whether the  
situation between the parties is one where the normal assumptions about free  
bargaining either no longer hold true or are incapable of being fairly applied: Uber at  
paras. 69-72 and 74. One situation where the normal assumptions about free  
bargaining may not apply is a standard printed form of contract presented by one  
party to another, generally referred to as a contract of adhesion: Bauer v. Bank of  
Montreal, [1980] 2 S.C.R. 102 at 108.  
[47] Not all such contracts are the product of an inequity in bargaining power,  
including for example where they clearly and effectively communicate the meaning  
of clauses with unusual or onerous effects: Uber at para. 88.  
[48] An improvident bargain is one where the contract at issue unduly advantages  
the stronger party or unduly disadvantages the more vulnerable party. This can take  
many forms, and improvidence must be assessed contextually. In essence, “the  
question is whether the potential for undue advantage or disadvantage created by  
the inequality of bargaining power has been realized”: Uber at para. 75.  
[49] Enhancing the advantage of a stronger party through choice of law, forum  
selection and arbitration clauses that violate the weaker party’s reasonable  
expectations by depriving them of a remedy are the types of situations that the  
unconscionability doctrine is meant to apply to: Uber at para. 89.  
[50] In Uber, the majority found that that a clear inequality in bargaining power  
existed between the plaintiff, Mr. Heller, and Uber in that Mr. Heller was powerless to  
negotiate any of the contract terms and there was a significant gulf between the  
parties in terms of their sophistication. In addition, the Supreme Court found that the  
arbitration clause at issue was clearly improvident in that it required an up-front  
$14,500US administration fee and gave Mr. Heller the impression that he had to  
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Page 15  
travel to the Netherlands at his expense to pursue claims against Uber: Uber at  
paras. 93-94. The arbitration clause was found unenforceable for these reasons.  
[51] In separate reasons Justice Brown, did not consider that the doctrine of  
unconscionability applied, but nonetheless found that the arbitration clause at issue  
in Uber was unenforceable for public policy reasons: Uber, para. 101.  
[52] Justice Brown stated that “[a]s a matter of public policy, courts will not enforce  
contractual terms that, expressly or by their effect, deny access to independent  
dispute resolution according to law.” As well, Brown J. stated that “[w]here a clause  
expressly provides for ‘arbitration’, while simultaneously having the effect of  
precluding it, however, these considerations which promote curial respect for  
arbitration dissolve …”: Uber, paras. 105 and119  
[53] Later in his reasons Brown J. stated at para. 125:  
[125] … I would therefore recognize a further, narrow exception to the  
general rule that a challenge to an arbitrator’s jurisdiction should first be  
resolved by the arbitrator. As I have explained, contracting parties cannot  
preclude access to legally determined dispute resolution. While arbitrators  
should typically rule on their own jurisdiction, an arbitrator cannot reasonably  
be tasked with determining whether an arbitration agreement, by its terms or  
effects, bars access, to that very arbitrator. It therefore falls to courts to do so.  
[54] Justice Brown’s view was that the courts should ask whether a clause that  
places limits on dispute resolution is reasonable or causes undue hardship: Uber,  
para. 129. Justice Brown suggested that the following factors be applied in  
answering this question: the nature of the disputes likely to arise under the parties’  
agreement – including whether the cost to pursue a claim is disproportionate to the  
quantum of the claim; the relative bargaining power of the parties; and, whether the  
parties have attempted to tailor the limit on dispute resolution such as by agreeing to  
excuse certain claims or to require the party with a stronger bargaining position to  
pay a higher portion of upfront costs: Uber, paras. 131, 134–135.  
Petty v. Niantic Inc.  
Analysis - Inequality in Bargaining Power  
Page 16  
[55] The plaintiffs submit that the first element of the test for unconscionability is  
met, being inequality of bargaining power on the basis that the defendants are  
individual consumers of games and the defendants are large sophisticated business,  
and the form of contract is a contract of adhesion. In this respect the plaintiffs rely on  
the decision of the Supreme Court of Canada in Douez v. Facebook, Inc. , 2017  
SCC 33.  
[56] In Douez, the Supreme Court discussed inequality of bargaining power in the  
portion of the judgment dealing with the unenforceability of a forum selection clause  
in Facebook’s terms of use for public policy reasons. In joint reasons for judgment  
the Supreme Court found that there was a gross inequality of bargaining power  
concerning the contract of adhesion formed between Ms. Douez and Facebook, a  
multi-billion dollar corporation. The Supreme Court noted that Ms. Douez was one of  
1.8 million British Columbia customers – and that the “take-it-or-leave-it” contract  
was common in today’s digital marketplace: Douez at paras. 54–55.  
[57] I find noteworthy the Supreme Court’s comments that unlike a standard retail  
transaction there were few comparable alternatives to Facebook, a social networking  
platform with extensive reach and that a party must accept the company’s terms or  
choose not to participate in its “ubiquitous social network”: Douez at para. 56. This  
observation was part of the context that the Supreme Court considered in  
determining the inequality in bargaining party between Ms. Douez and Facebook: at  
paras. 56–57.  
[58] At para. 93 of Uber the Supreme Court set out its basis for its finding that an  
inequality of bargaining power existed between Mr. Heller and Uber. The Court  
noted that the arbitration agreement in that case was part of a standard form  
contract and Mr. Heller was powerless to negotiate its terms. In addition, the Court  
noted a significant gulf in sophistication between Mr. Heller and Uber, a large  
multinational corporation. Further, the Court noted that that the arbitration agreement  
contained no information concerning the costs of arbitration in the Netherlands and  
 
Petty v. Niantic Inc.  
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Mr. Heller could not be expected to appreciate the financial and legal implications of  
agreeing to arbitrate under the ICC Rules or under Dutch law.  
[59] I am not satisfied that an inequality of bargaining power justifying a finding  
that the arbitration clause is unconscionable is made out on the facts of this case. As  
the Supreme Court in Uber and the British Columbia Court of Appel in Pearce  
indicated, an analysis of unconscionability focuses on the vulnerability of the weaker  
party and unfairness of a contract or one of its terms.  
[60] Unlike the nature of the service at issue in Douez (communication and social  
networking) and Uber (an employment relationship), there is no evidence that use of  
the games Pokémon Go and Harry Potter: Wizards Unite, or the ability to purchase  
loot boxes within those games, are important elements of everyday life which make  
the plaintiffs particularly dependant or vulnerable in terms of their need to access the  
game platforms. The games themselves are free and the user has the choice  
whether to purchase loot boxes.  
[61] In Pearce the plaintiffs included individuals who were facing potential  
bankruptcy and therefore vulnerable.  
[62] In this case there is no evidence of a special relationship of trust, such as, for  
example, one which might exist in an employer-employee agreement or an  
agreement involving the provision of financial, health or educational services.  
[63] In addition, I am not satisfied that the plaintiffs were unable to understand the  
Arbitration Agreement. Unlike the arbitration clause at issue in Uber, in this case the  
ability to choose between proceeding in small claims court and arbitrating, the costs  
of arbitration and arbitration procedure are sufficiently described in the Arbitration  
Agreement.  
[64] Even if I am wrong on this issue, I am not satisfied that the Arbitration  
Agreement is an improvident bargain in that it unduly advantages the defendants  
and or unduly disadvantages the plaintiffs.  
Petty v. Niantic Inc.  
Analysis - Improvident Bargain  
[65] The plaintiffs submit that the Arbitration Agreement is unconscionable  
Page 18  
because the terms effectively preclude access to justice in the following ways:  
a) The arbitration clause is part of a standard-form contract of adhesion  
drafted by the defendants for their own benefit.  
b) The terms of the arbitration clause grant the defendants the right to seek  
various relief in court to protect copyrights, trademarks, trade secrets,  
patents or other intellectual property – which is a one-sided clause  
included by the defendants for their own benefit.  
c) Any arbitration is to be conducted under California law, excluding its  
conflict of law rules preventing the arbitrator from giving effect to the  
plaintiff’s claims. The choice of law clause effectively attempts to contract  
out of the Competition Act.  
d) Any arbitration is governed by the American Arbitration Association (AAA)  
Rules – and the AAA Rules are not provided with the Terms of Service.  
e) The AAA rules have a filing fee of $200 to initiate an arbitration.  
f) The Terms of Service say the defendants will reimburse fees for claims  
totalling less than $75,000 unless the arbitrator determines that the claims  
are frivolous, but does not specify a procedure or timing for  
reimbursement.  
g) There is no right of discovery for claims that do not exceed $10,000 which  
perpetuates an unfair information imbalance in favour of the defendants.  
h) The plaintiffs cannot afford to hire a lawyer to pursue their claims  
individually and individual claims are small and uneconomical.  
 
Petty v. Niantic Inc.  
Page 19  
i) The inclusion of a class action waiver in the Arbitration Agreement denies  
a customer from participating in a class proceeding. No reasonable  
customer would have agreed to be denied the remedy of doing so.  
[66] The defendants contend that the Arbitration Agreement is inherently  
consumer friendly, fair and facilitates access to justice through low or no cost  
arbitration or through small claims court if the customer so chooses. In this sense  
they contend that this case is not analogous to the arbitration clause in Uber, in  
which the Supreme Court of Canada found, in large part as a result of cost barriers,  
that the right to arbitrate in that case was in effect “illusory”: Uber at paras. 86, 94  
and 97.  
[67] The defendants rely heavily on the decision of the British Columbia Court of  
Appeal in Williams v. Amazon.com, Inc., 2020 BCSC 300, in which the Court found  
that an arbitration clause was enforceable. I will address the applicability of the  
reasons in Williams later in my reasons.  
[68] With respect to the plaintiffs’ complaints that the Arbitration Agreement  
effectively precludes access to justice, the defendants say as follows:  
a) A customer may opt-out of the Arbitration Agreement within 30 days of  
acceptance. If a customer does not opt-out they have a choice to  
commence a small claims court action or to commence an arbitration to  
make a claim arising from their use of the game;  
b) Unless the parties agree otherwise, the location of the arbitration would be  
in the customer’s home jurisdiction – in this case either B.C. or Alberta;  
c) The use of a governing law clause, in this case applying California law,  
does not determine the validity of an arbitration agreement and does not  
provide a basis for this Court to decline to enforce the Arbitration  
Agreement by refusing a stay or proceedings;  
d) The AAA Rules are readily accessible;  
Petty v. Niantic Inc.  
Page 20  
e) If the customer’s claim is less than $75,000 the defendants will pay all  
fees for the arbitration;  
f) The defendants agree not to seek legal fees from the customer;  
g) If the customer’s claim is for less than $10,000 the arbitration will be  
conducted in writing;  
h) There is no authority for the proposition that the Arbitration Agreement is  
not enforceable because the procedural rules do not specify procedure or  
timing for reimbursement of arbitration fees;  
i) The Arbitration Agreement does not impermissibly attempt to contract out  
of the Competition Act and even it did so, pursuant to the decision in  
Williams there is no probation against doing so;  
j) There is no absolute bar on further document and oral discovery beyond  
what the parties submit with their arbitration materials. In any event the  
plaintiffs have not explained why extensive discovery is required to  
advance their claims; and  
k) The Arbitration Agreement expressly provides that customers who prevail  
at arbitration are entitled to their lawyers’ fees and expenses.  
[69] As confirmed in Uber, the question in determining whether the Arbitration  
Agreement is improvident is whether the potential for undue advantage or undue  
disadvantage created by the inequality of bargaining power has been realized: Uber  
at para. 74.  
[70] Of note is the Supreme Court of Canada’s use of the word “undue” to modify  
words “advantage” and “disadvantage”. From this use it can be taken that some  
advantage or disadvantage may be acceptable. The degree of the advantage or  
disadvantage must also be considered contextually in order to determine whether a  
contractual term is unduly unfair including the positions of the parties: Uber at  
para. 75.  
Petty v. Niantic Inc.  
Page 21  
[71] The cost of proceeding to arbitration or small claims court is a potential  
economic barrier which may constitute a disadvantage to a claimant. Both Ms. Petty  
and Mr. Stasch have sworn, in two lines in their affidavits, that they cannot afford to  
hire a lawyer to pursue their claims individually, including through arbitration. No  
further evidence is provided upon which I can determine that they are particularly  
vulnerable or desperate.  
[72] As the plaintiffs point out, their claims are relatively modest, being $450 for  
Ms. Petty and $2,115.77 for Mr. Stash. The up-front filing fee for commencing an  
arbitration under the AAA Rules is $200. The costs of commencing an action in  
small claims court in British Columbia is $100 for a claim under $3,000 and $150 for  
claims over this amount. As was stated by Justice Horsman (as she then was) at  
para. 86 of Williams, a $200 up-front filing fee is relatively modest.  
[73] The plaintiffs contend that the filing fee is not the only economic barrier and  
that legal costs should be considered. I agree that legal costs of advancing a claim  
through arbitration or small claims court would almost certainly exceed the amount  
of the plaintiffs’ claims – and I assume those of other potential class members. As  
such, this constitutes a disadvantage when compared with the cost of proceeding as  
a member of a class.  
[74] In this case the costs disadvantage is mitigated by the provisions of the  
Arbitration Agreement which provide that for claims of less than $75,000 the  
defendants will pay for filing and arbitrators’ fees and the customer will be  
reimbursed for his or her legal costs if they prevail, whereas the defendants will not  
claim legal fees if they prevail. The exception is where an arbitrator finds that the  
customer’s claim is frivolous or brought for an improper purpose.  
[75] Although the plaintiffs contend that the Terms of Service do not specify a  
procedure or timing for reimbursing the costs of arbitration, they do not explain how  
this creates an unfair advantage or disadvantage. There is no evidence that such  
reimbursement would not be made in a timely manner. As well, the fact that the  
arbitrator has the discretion to decline to order reimbursement of costs of a frivolous  
Petty v. Niantic Inc.  
Page 22  
claim or one brought for an improper purpose does not constitute an undue  
disadvantage – rather it encourages only meritorious claims to be advanced.  
[76] I do not find the arbitration process to be unduly disadvantageous. The  
arbitration can be conducted by written submissions and the arbitrator has the ability  
to order further discovery, even for claims of under $10,000. In addition, decisions of  
an arbitrator are required to be made in a timely manner. Under the AAA Rules a  
decision is required within 14 or 30 days of hearing a dispute, depending on the  
nature of the issue in dispute.  
[77] To the extent that there is no automatic right of discovery for claims that do  
not exceed $10,000, I do not have any evidence on which I can conclude that this  
perpetuates an unfair informational imbalance in favour of the defendants. The  
plaintiffs have not indicated what undue disadvantage arises from the potential lack  
of discovery by, for example, indicating what documents may be sought. I note that  
the onus is on the plaintiffs in this application to prove that the Arbitration Clause is  
unconscionable – not for the defendants to prove the opposite. In any case, the  
arbitrator has the ability to compel discovery if required.  
[78] With respect to the plaintiffs’ argument that the AAA Rules are not provided  
with Terms of Service, the defendants appropriately point out that these rules are  
accessible by going to the web address provided in the Terms of Service. I do not  
find that having to access the AAA rules in this way constitutes an undue  
disadvantage to the plaintiffs.  
[79] With respect to the plaintiffs’ submissions that the Arbitration Agreement  
incorporates a class action waiver prohibiting customers from proceeding in a class  
proceeding, thereby impeding their access to justice I note as follows: a customer  
may opt-out of the Arbitration Agreement within 30 days of agreeing to the Terms of  
Service when they download a game—which provides the customer with some time  
to decide whether to advance a claim in superior court; and, if a customer does not  
opt-out they have a choice to proceed with a small claims court action or to  
commence arbitration. That is, a customer retains various access to justice  
Petty v. Niantic Inc.  
Page 23  
alternatives, excluding (if they do not opt-out of the Arbitration Agreement within 30  
days of accepting the Terms of Service) the ability to participate in a class  
proceeding or otherwise in a provincial superior court.  
[80] I acknowledge the following comments of the Court of Appeal in Pearce at  
paras. 241 and 256 concerning the access to justice benefits of class proceedings:  
[241] It is important to remember that one of the key purposes of allowing  
representative and class proceedings is to provide access to justice for  
people whose claims would otherwise be too small to be economical to  
prosecute: see Western Canadian Shopping Centres Inc. v. Dutton, 2001  
SCC 46 at para. 28 [Dutton]. Allowing a number of people with common  
issues to band together in a single lawsuit gives them the leverage to  
vindicate their rights. As a group, they are able to afford legal representation  
(either through their shared resources or more commonly through a  
contingency fee that their group representation makes feasible), and they are  
able to prosecute civil claims that would be too costly or complex to pursue  
as individuals.  
[…]  
[246] As in Uber, the class action waiver in this contract essentially modifies  
all the substantive rights of the proposed class members. Their rights are  
subject to the caveat that if they wish to enforce any of them, they will be  
denied a critical tool designed to provide them with a path to access justice,  
namely, class or representative proceedings. No reasonable person who  
understood the implications of the class action waiver would have agreed to  
be denied one of the single most important tools available to allow them to  
vindicate their rights.  
[81] In my view, the Court of Appeal did not suggest that a class action waiver  
clause prohibiting a class proceeding in cases involving complex issues and claims  
of a relatively low monetary value will always be found unconscionable. The above  
referenced reasons in Pearce must be considered in light of the fact that the case  
did not concern the enforceability of an arbitration clause, as one did not exist in the  
relevant contract, but rather concerned the enforcement of a class action waiver  
clause: see Pearce v. 4 Pillars Consulting Group Inc., 2019 BCSC 1851 at  
para. 154.  
[82] I note that despite having an opportunity to do so, the majority of the Supreme  
Court of Canada in Seidel v. TELUS Communications, 2011 SCC 15, declined to  
determine the issue of whether class action waivers writ-large are unconscionable.  
Petty v. Niantic Inc.  
Page 24  
The Supreme Court of Canada found that the arbitration clause at issue in Seidel  
was structured to make a class action waiver dependent on the arbitration  
proceeding: paras. 45–46.  
[83] Finally, I do not consider that the term in the Arbitration Agreement granting  
the defendants the right to seek various relief in court to protect copyrights,  
trademarks, trade secrets, patents or other intellectual property to be a one-sided  
clause included by the defendants for their own benefit. On its face, this clause  
allows both the defendants or their customers to advance such claims for relief in  
court.  
[84] Later in my reasons I will address the plaintiffs’ submissions that the  
requirement that arbitration is to be conducted under California law effectively  
attempts to contract out of the Competition Act.  
Analysis - Public Policy  
[85] As set out above, in determining whether to refuse to enforce an arbitration  
clause for reasons of public policy the court must determine whether the arbitration  
clause causes undue hardship. Again, as set out above, the following factors are to  
be considered in determining whether there is a public policy basis for refusing to  
enforce an arbitration agreement: the nature of the disputes that are likely to arise  
and whether the cost to pursue a claim is disproportionate to the quantum of the  
claim; the relative bargaining power of the parties; and, whether the parties have  
attempted to tailor the limit on dispute resolution: Uber at paras. 131,134–135.  
[86] There are policy reasons for enforcing arbitration clauses or agreements. As  
Brown J. stated at para. 116 of Uber:  
[116] […] legislators have intervened by enacting modern arbitration  
legislation …” and “[o]ur conception of access to justice has been modified  
accordingly, to account for “the other important objectives pursued by the  
Arbitration Act” (Wellman, at para. 83) It is now accepted that courts are not  
the only bodies capable of providing dispute resolution according to law.  
Indeed, arbitration is endorsed and encouraged as a means for resolving  
disputes (Desputeaux v. Editions Chouette (1987) inc., 2003 SCC 17, [2003]  
1 S.C.R. 178, at para 38).  
 
Petty v. Niantic Inc.  
Page 25  
[87] In deciding whether the Arbitration Clause is unenforceable for public policy  
reasons, this Court must consider the Terms of Service as a whole: see Uber at  
para. 131.  
[88] Again, Uber involved a situation where as a result of the specific requirements  
of the arbitration clause, including the requirement for payment of a very large up-  
front fee and the ostensible requirement to arbitrate in the Netherlands under Dutch  
law, the arbitration clause prevented access to justice. This is not the case here.  
[89] As outlined in my reasons above dealing with the issue of unconscionability,  
the Arbitration Agreement does not present an insurmountable economic or  
procedural barrier to the plaintiffs. In summary, the plaintiffs have the choice to  
opt-out of the Arbitration Agreement within 30 days and after that period of time has  
elapsed, have the choice of whether to proceed to small claims court or to arbitration  
– both in their home jurisdiction. The costs of an arbitration, including filing and  
arbitrator’s fees, are to be bourn by the defendants. As well, the plaintiffs are entitled  
to be reimbursed by the defendants for their legal fees if they prevail in their case  
and are not subject to the defendants’ legal fees if they are not successful. In  
addition, a decision is timely in that arbitration decisions under the AAA Rules are to  
be made within 14 or 30 calendar days depending on the type of hearing. In my  
view, an arbitration in accordance with the Arbitration Agreement is sufficiently  
tailored to avoid undue hardship and therefore is not unenforceable for public policy  
reasons.  
[90] I accept that arbitration or small claims court is not the plaintiffs’ preferred  
method of resolving the disputes in this case because of the potential complexity of  
the matters in issue and the resulting costs. Despite the relative cost of proceeding  
to arbitration or small claims court on an individual basis compared to the amount of  
the claims at issue, accessible arbitration remains a viable method of resolving the  
plaintiffs’ individual disputes.  
[91] In my view, even though under the Terms of Service consumers do not have  
an opportunity to negotiate the terms of the Arbitration Agreement, the fact that they  
Petty v. Niantic Inc.  
Page 26  
do not have the ability to access a particular form of proceeding, in this case a class  
or other proceeding in the British Columbia Supreme Court, does not make the  
Arbitration Agreement unfair or unduly burdensome.  
ARBITRATORS’ JURISDICTION TO DETERMINE CLAIMS UNDER THE  
COMPETITION ACT  
[92] In the notice of civil claim the plaintiffs allege that the defendants have  
breached various provisions of s. 52 of the Competition Act concerning false and  
misleading representations and seek damages pursuant to s. 36. The plaintiffs  
contend that the claims under the Competition Act are not capable of arbitration in  
this case as under the Terms of Service the exclusive choice of law and forum  
clauses specifically exclude the possibility of applying Canadian Law. They contend  
that this constitutes a public policy basis for not enforcing the Arbitration Agreement  
in respect of the Competition Act claims.  
[93] The plaintiffs note that the Terms of Service contain an exclusive choice of  
law clause applying California state law “excluding its conflict of law rules”, however,  
s. 36 of the Competition Act provides that claims can only be determined by “a court  
of competent jurisdiction”. The plaintiffs do not contend that in general, the claims  
under the Competition Act are not arbitrable. Rather, the plaintiffs contend that an  
American arbitrator acting under American law is not a “court of competent  
jurisdiction” because the Terms of Service expressly exclude the application of  
Canadian law. For this reason, the plaintiffs contend that the Competition Act claims  
cannot be stayed in favour of arbitration – as doing so would prevent the plaintiffs  
from advancing these claims.  
[94] The plaintiffs rely upon an expert opinion provided by Professor Tanya  
Monestier of the Roger Williams School of Law in Rhode Island, that an arbitrator  
applying California law would not apply the Competition Act to the plaintiffs’ claims.  
[95] The defendants rely upon the contrary opinion of Professor George A.  
Bermann with the Columbia University Faculty of Law in New York. Professor  
Bermann provided an opinion that an arbitration tribunal seated in Canada (as would  
 
Petty v. Niantic Inc.  
Page 27  
be the case in an arbitration pursuant to the Arbitration Agreement) would have the  
authority to determine whether the California choice of law clause in the Arbitration  
Agreement precluded it from enforcing the plaintiffs’ Competition Act claims. In  
Professor Bermann’s opinion if California law rather than Canadian law governed the  
arbitral proceeding in this case, the presence of the California choice of law clause  
would not preclude an arbitral tribunal from enforcing the plaintiffs’ Competition Act  
claim.  
[96] The defendants submit that there is conflicting expert evidence on the issue  
of whether an arbitrator would consider the plaintiffs’ Competition Act claims in light  
of the choice of law clause if the arbitration procedure is governed by California law  
– which raises complex questions of mixed fact and law. They submit that  
determining this issue will require more than a superficial analysis of the case and  
therefore engages the competence-competence principle, which dictates that in  
these circumstances the issue of jurisdiction should be a matter for the arbitrator in  
first instance, relying on the decisions in Uber at paras. 49-50 and Dell at  
paras. 84-85.  
[97] The defendants also rely upon the decision of Justice Horsman in Williams in  
which the Court considered whether Competition Act claims should be arbitrated  
pursuant to the arbitration clause. The clause provided that “the laws of the state of  
Washington, United States, without regard to principles of conflict of laws” governed  
the agreement between Mr. Williams and Amazon.  
[98] As is the case here, in Williams each party tendered competing expert  
evidence on the question of whether an arbitrator appointed in that case would be in  
a position to adjudicate Competition Act claims. Justice Horsman found that the  
issue of an arbitrator’s jurisdiction over claims advanced under the Competition Act  
should be determined by the arbitrator, in accordance with the competence-  
competence principle: Williams, paras. 61-69.  
[99] The plaintiffs contend the Williams decision, which is under appeal, was  
decided before Uber. The plaintiffs contend that this Court should rule on the  
Petty v. Niantic Inc.  
Page 28  
arbitrator’s jurisdiction to rule on the Competition Act claims rather than referring the  
question of jurisdiction to the arbitrator. The plaintiffs submit that it is evident from a  
superficial review of the record, specifically the choice of law provision in the Terms  
of Service, that an arbitrator is not a court of competent jurisdiction to determine the  
Competition Act claims in this case, which they contend is consistent with the  
Supreme Court’s approach in Uber.  
[100] Further the plaintiff contends that the decision in Douez should be applied in  
this case. In Douez the Supreme Court was called upon to determine whether to  
give effect to a forum selection clause in Facebook’s terms of service, which  
required the adjudication of disputes with Facebook to take place in California. In  
addition to the forum selection clause there was a California choice of law clause.  
The Supreme Court commented that the British Columbia Supreme Court was  
“better placed” to assess the purpose and intent of the Privacy Act, R.S.B.C. 1996,  
c. 373, which was the statute at issue in that case: Douez at paras. 69,72. The  
plaintiffs contend that as was found in Douez, a Canadian court and not a foreign  
tribunal should decide whether the Competition Act applies in this case.  
Analysis  
[101] In my view the circumstances of this case are, as the defendants submit,  
analogous to those in Williams in several ways. Professor’s Bermann’s expert  
opinion is similar to the expert evidence relied upon by the defendants in Williams  
and the plaintiffs’ arguments in this case regarding the choice of law clause and the  
Competition Act are the same arguments that were rejected by Justice Horsman in  
Williams: at paras. 63-64, 69-77.  
[102] At para. 69 Justice Horsman found that based on the competence-  
competence principle it was inappropriate to determine whether the arbitrator had  
the jurisdiction to grant relief under the Competition Act, stating as follows: :  
[69] In light of the principle of competence-competence, I do not consider it  
appropriate for me to finally determine whether an arbitrator appointed under  
the [applicable arbitration clause] would have the jurisdiction grant relief  
under the Competition Act. That is for the arbitrator to decide.  
 
Petty v. Niantic Inc.  
Page 29  
[103] Justice Horsman went on to consider whether the arbitration clause in  
Williams was contrary to public policy because it permitted Competition Act claims to  
be adjudicated in a foreign forum and under foreign law – thereby undermining  
Parliaments intention to create civil remedies in Canadian courts for anti-competitive  
conduct: Williams at para. 69.  
[104] Justice Horsman found that the decision in Douez was not directly relevant to  
this issue as that case involved a forum selection clause and not the choice of law  
clause. She noted that the issue of the enforceability of an arbitration clause did not  
concern two competing forums for public adjudication of a dispute and that unlike  
with a forum selection clause, “there is no concern that a court will be required by a  
contractual agreement … to adjudicate a dispute that is not properly before it”:  
Williams at paras. 76-77. The same applies in the case before me.  
[105] Justice Horseman noted that “[a]rbitration is a method of private dispute  
resolution”, that there are limited grounds to invalidate an arbitration clause and it  
must be shown that an arbitration agreement is void, inoperative or incapable of  
being performed”: Williams at para. 78. Justice Horsman recognized that an  
arbitration clause might be rendered invalid to the extent that it amounts to  
contracting out of a statutory entitlement where prohibited by statute, but, there is no  
provision in the Competition Act invalidating “contracting out” of its application:  
Williams, paras. 78 and 79.  
[106] Justice Horsman concluded that it was possible that an arbitrator may find,  
under the arbitration clause at issue in Williams, that they had the jurisdiction to  
award damages under s. 36 of the Competition Act and if not, a remedy was  
available under U.S. antitrust law. Ultimately, Justice Horsman concluded that the  
prospect that an arbitrator may lack jurisdiction to award damages under s. 36 of the  
Competition Act is not a ground for finding the arbitration clause at issue to be void,  
inoperative or incapable of performance: Williams at paras. 80-81.  
[107] The reasoning of Justice Horsman in Williams has not been overruled by the  
decision of the Supreme Court in Uber.  
Petty v. Niantic Inc.  
Page 30  
[108] In Uber at para. 46 the Supreme Court stated that “a court should not refer a  
bona fide challenge to an arbitrator’s jurisdiction to the arbitrator if there is a real  
prospect that doing so would result in the challenge never being resolved”. The  
Supreme Court stated that in these circumstances, a Canadian court may resolve  
whether the arbitrator has jurisdiction over the dispute and, in so doing, may  
thoroughly analyze the issues and record: Uber at para. 46.  
[109] With respect to what constitutes a “real prospect”, the Supreme Court in Uber  
commented that the up-front arbitration fees in that case “imposed a brick wall  
between Mr. Heller and the resolution of any of the claims he has levelled against  
Uber” and that “[a]n arbitrator cannot decide the merits of Mr. Heller’s contention  
without those – possible unconscionable – fees first being paid”: at para. 47. For this  
reason, the Supreme Court determined that it was better for that court to determine  
issues of the validity of the arbitration agreement at issue rather than referring them  
to arbitration in the Netherlands: Uber at paras. 47-48.  
[110] In this case expert evidence has been filed by both parties concerning an  
arbitrator’s ability to decide his or her jurisdiction to address the plaintiffs’  
Competition Act claims. In Uber the Supreme Court confirmed that adducing expert  
evidence as to foreign law concerning an arbitrator’s jurisdiction over the dispute at  
issue prevented the Canadian court from deciding the jurisdictional issue – which  
should be decided by the arbitrator in the first instance pursuant to the competence-  
competence principle: Uber at paras. 49–50 referring to Dell Computer Corp. v.  
Union des consommateurs, 2007 SCC 34.  
[111] In Dell at para. 84, the Supreme Court set out the general rule that “in any  
case involving an arbitration clause, a challenge to the arbitrator’s jurisdiction must  
be resolved first by the arbitrator”, with an exception being where the challenge was  
based solely on a question of law. The Supreme Court stated that where the  
challenge required the production and review of factual evidence the courts should  
normally refer the case to arbitration as arbitrators have the same resources and  
expertise of the courts. Finally, the Supreme Court stated that where questions of  
Petty v. Niantic Inc.  
Page 31  
mixed fact and law are concerned, unless the questions of fact require only  
superficial consideration of the documentary evidence in the record, the case should  
be referred to arbitration: Dell at paras. 84-85.  
[112] There is no dispute that determining the jurisdiction of an arbitrator to decide  
claims under the Competition Act involves mixed questions of fact and law. In my  
view determining questions of fact concerning the impugned marketing activities of  
the defendants involving the sale of loot boxes will require more than a superficial  
analysis of the case and therefore engages the competence-competence principle.  
In these circumstances, I conclude that determining the issue of jurisdiction should  
be a matter for the arbitrator in first instance.  
CONCLUSION  
[113] In conclusion, the prerequisites for a stay of legal proceedings under s. 8(2) of  
the ICAA are satisfied, in relation to the non-BPCPA claims. Further, I conclude that  
the Arbitration Agreement is not void, inoperative or incapable of being performed.  
[114] In addition, with respect to the claim of Mr. Stasch, there is insufficient  
evidence on which I can conclude that the Arbitration Agreement is void under  
s. 16(2) of ACPA.  
[115] I order that this proceeding be stayed in relation to the plaintiffs’ claims,  
excluding those brought pursuant to the BPCPA.  
“Mayer, J.”  
 


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