Appeals court hears arguments in Sayidi v. Microsoft over whether users consented to arbitration

James Moon, counsel for Microsoft, told the court the trial court erred in denying Microsoft’s motion to compel arbitration and reserved three minutes for rebuttal. Moon said the record (citing Suzanne Fogarty’s declaration at record p.135) shows plaintiffs created Microsoft accounts between 2013 and 2016 and that the registration flow informed users that choosing the "Next" action meant they agreed to the Microsoft Services Agreement (MSA).

Moon argued that at least three plaintiffs admitted they were logged into Edge using their Microsoft accounts and that a recurring allegation about a plaintiff identified as "MC" has changed across filings. "If he used a Microsoft account and he obtained the benefits of that account... he is bound by the terms governing that account," Moon said, invoking judicial estoppel, equitable estoppel, and third-party-beneficiary theories as bases for enforcing arbitration against MC.

Glenn Danis, counsel for the plaintiffs, urged the court to affirm the trial court’s order. Danis outlined four primary points: the MSA does not apply to the use of Microsoft Edge; Microsoft failed to prove assent; certain MSA provisions are substantively unconscionable (including a ban on public injunctive relief and a batching provision); and MC cannot be compelled to arbitrate because he disaffirmed any account.

Danis argued the MSA sets out an exhaustive list of covered services and "doesn’t reference EDGE in any way," and he criticized Microsoft’s reliance on a single undated screenshot and on a declaration describing historical interfaces. On assent mechanics, Danis said entering a password and pressing Enter is not equivalent to clicking a clearly labeled "Next" button showing unambiguous agreement: "By simply picking a password and hitting enter is not that," he said.

On unconscionability, Danis highlighted a batching provision that could delay arbitrations for years and a bar on public injunctive relief, asserting those terms tilt arbitration unfairly toward Microsoft. He also reiterated that the district court considered broader privacy allegations—regarding health and financial information—when addressing related issues, not solely whether a user was logged into an account.

In rebuttal, Moon emphasized that the relevant inquiry is whether the dispute touches on a covered service (the Microsoft account or privacy statement), not whether Edge is named verbatim in the MSA. He told the court the complaint repeatedly alleges that Microsoft connected browsing history to personally identifiable information when users were logged into Microsoft accounts, and he distinguished authority (e.g., McClellan) by noting the MSA includes tolling and allows batches of 50 cases, which the defense said avoids the statutory-tolling problem in other batching cases.

The court questioned both sides about evidentiary timing, whether the trial court relied on particular allegations, and whether factual disputes warrant remand. The matter was submitted after argument.