Case 1:21-cv-08082-LGS Document 5-47 Filed 10/11/21 Page 1 of 3
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`AMERICAN ARBITRATION ASSOCIATION
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`In the Matter of the Arbitration between
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`Case Number: 01-20-0019-3949
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`HaoZhe Wang (Claimant)
`-vs-
`Skype USA/Microsoft (Respondent)
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`AWARD OF ARBITRATOR
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`I, Myrna A. Barakat, THE UNDERSIGNED ARBITRATOR, having been designated in accordance with the
`arbitration agreement entered into between the above-named parties, and having been duly sworn, and having duly
`heard the proofs and allegations of the Parties, HaoZhe Wang, who was self-represented, and Skype
`USA/Microsoft, represented by Geoffrey Brounell and Mohammad Pathan of Davis Wright Tremaine LLP, at an
`evidentiary hearing held on June 22, 2021, do hereby, AWARD, as follows:
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`In this case, Mr. HaoZhe Wang (“HW”)’s Skype account was temporarily suspended by Skype USA (“Skype”), a
`company owned by Microsoft (“MS”), while HW was traveling to China. Although the parties disagree on the date
`the account in question was opened, they agree on the following:
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`• On December 11, 2018, HW paid $10 to purchase “Skype Credit,” which allowed him to make calls using
`Skype. No other payments were made to open the Skype account or to subscribe to any additional Skype
`services.
`• On or about January 20, 2019, while at a hotel in China, HW attempted to log on to his Skype account but
`was unable to. On or about January 23, 2019, in order to restore his account, HW verified his account via
`SMS; to do so, he had to provide Skype with his cell phone number to receive the SMS required for
`authentication. Shortly after doing so, HW’s Skype account was restored.
`• Following this incident, HW sought an explanation from MS as to the reason for the account suspension. He
`was told that there were concerns regarding “questionable activities” and referred to a link for additional
`information. HW continued to seek more specific information regarding the circumstances that led to the
`account suspension. On January 26, he received an email advising him that MS could not disclose specifics
`regarding the block but listed some reasons that could have led to it. HW continued to inquire for more
`detail. On October 27, 2020, after escalation regarding the matter, a MS representative, Mr. Jose Pablo
`Lippi, reiterated to HW that MS reserves the right not to share information regarding the internal business
`and systems operations. He went on to describe the use of artificial intelligence by MS to, for example,
`systematically and automatically scan activity to detect and disrupt suspicious activity and notify users of
`such. Additionally, in that email, Mr. Lippi informed HW that his account was thoroughly reviewed and
`confirmed to HW that it was not compromised. The parties submitted various email exchanges and
`transcripts of conversations HW had with Skype representatives covering this matter. Neither party
`contested the accuracy of those exchanges and transcripts.
`• The parties agree that the “Microsoft Services Agreement,” effective May 1, 2018 (“MSA”), applies to this
`case and that it is governed by NY law.
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`Case 1:21-cv-08082-LGS Document 5-47 Filed 10/11/21 Page 2 of 3
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`HW’s Claims and Demands:
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`On December 18, 2020, HW filed an initial demand with the American Arbitration Association requesting $13,230
`in monetary relief and a “[f]ull technical accounting of the possible hacking incident behind the January 2019
`incident.” In this initial demand, HW alleges that MS not giving him a satisfactory answer to his queries as to why
`his account was suspended led him to spend numerous anxious hours monitoring his account and online activity and
`that he was entitled to notification from MS if there were bad actors involved or, at the very least, that MS should
`bear the cost of his monitoring efforts. He also claims that he was “coerced” into giving his mobile number to
`authenticate and reinstate his Skype account. Further, he states that MS “luring [him] into an agreement and into
`paying amounted to acts of wire fraud.” Finally, HW claims that this incident was not an isolated event but a
`“scheme” and constituted “a clear pattern of criminal behavior” and concludes with allegations of wire fraud.
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`On February 20, 2021, HW amended his initial demand, claiming an additional $10,000 in “emotional damages as
`well as for the businesses’ fraudulent act, deceitful business practice, and intentional infliction of emotional
`distress.” In this amended demand, HW states that Mr. Lippi’s confirmation on October 27, 2020 that his account
`was not compromised “exposed the lies the businesses fed [him] prior to that point and the fraud they committed.”
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`On June 8, 2021, at the request of the Arbitrator to flesh out his initial claims, HW filed an amended demand. In that
`final demand, HW’s claims rose to $75,020 and included a series of additional requests: (i) to enjoin MS from
`requesting personal information that wasn’t provided at the start of the service, to order MS to disclose how HW’s
`personal information was “collected, stored, handled and distributed since January 2019’ and to order destruction of
`such data, (ii) “[t]o enjoin [MS] from denying services on the ground of [HW’s] use of public or shared IPs, (iii) [t]o
`enjoin [MS] from denying services on the ground of using public or shared IPs when [HW] is physically in China,
`(iv) [t]o declare null and void any contractual clauses that may be construed by [MS] to deny services to [HW] for
`using public or shared IPs; and (v) to award HW $75,020 in damages: $10 per the contract, $20,000 for intentional
`infliction of emotional distress and $55,010 in “statutory and actual damages for financial losses.”
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`Finally, at the evidentiary hearing on June 22, 2021, HW asserted additional claims of RICO violations for deceitful
`business practices, antitrust violations with respect to MS’s VPN offering as well as FTC-related unfair businesses
`practices. These claims were not part of any of his prior demands, but the Arbitrator gave him the opportunity to
`submit additional documentation in support of these claims following the hearing, which HW did. MS was also
`given the opportunity to submit additional documentation to respond to those claims and submissions, MS elected
`not to.
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`MS’s Response:
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`MS refers to the MSA provisions to deny all allegations. More specifically, they point to the following provisions:
`• Article 4(a)(ii): “If we reasonably suspect that your Microsoft account is being used by a third party
`fraudulently (for example, as a result of an account compromise), Microsoft may suspend your account
`until you reclaim ownership. Based on the nature of the compromise, we may be required to disable access
`to some or all of Your Content.” MS contends that this provision “expressly authorized [MS] to take the
`steps about which [HW] complains.”
`• Article 13: “If you have any basis for recovering damages … you agree that your exclusive remedy is to
`recover, from Microsoft or any affiliates, resellers, … direct damages up to an amount equal to your
`Services fee for the month during which the loss or breach occurred (or up to $10.00 if Services are free).
`You can’t recover any other damages or losses, including direct, consequential, lost profits, special,
`indirect, incidental or punitive.” MS contends that, based on the foregoing, should liability be found, the
`MSA limits MS’s liability to $10.
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`Analysis and Final Award:
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`The circumstances described and agreed as factual by both parties fit squarely within the fact pattern contemplated
`by Article 4(a)(ii) of the MSA. Although HW claims that he was singled out, nothing in what was submitted by him
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`Case 1:21-cv-08082-LGS Document 5-47 Filed 10/11/21 Page 3 of 3
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`provides any evidence of such. Respondent’s submissions and witness, Mr. Pablo, credibly described the processes
`that led to the account suspension, none of which indicate nefarious nor unreasonable behavior, motive or intent vis
`a vis HW. Similarly, nothing in HW’s submissions substantiates his claim of being coerced to give MS his cell
`number. By his own admission, HW voluntarily shared his cell phone number in an attempt to restore his Skype
`account while traveling in China. HW had the option to either delay sharing his cell phone number until he was
`back in the US to the extent he had privacy concerns while he was in China, as he claims, or dig deeper for a
`different resolution method, which he claims was possible but not readily offered up.
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`Even if one were to find any fault by MS either in suspending the account or, as HW also claims, in not giving him
`timely and satisfactory answers to his queries following the incident, Article 13 (which appears in bold in the MSA)
`is clear on its face and limits liability to $10. On this point, HW’s contention that the wording as to what constitutes
`a free account is unclear is somewhat puzzling. Indeed, HW claims that, because he purchased Skype credit, his
`account was not a “free” account and thus not subject to the $10 cap on liability (Article 13 of the MSA). If one
`were to agree with his interpretation then, per Article 13 of the MSA, had fault been found then he wouldn’t be
`entitled to any amount since he didn’t pay any service fee for the month during which he alleges there was a loss or
`breach. In fact, documents submitted by MS reveal that HW did use some of his Skype credit prior to their
`expiration and HW confirmed that the payment he made was in exchange for credit to make Skype calls and that he
`made no other payments.
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`Although one could have some sympathy for HW’s dissatisfaction with MS’ customer service and his privacy and
`identity theft concerns, the reality in which we live in requires that we constantly monitor our online activity and,
`individually and collectively, take all action necessary to secure such. MS acted squarely within the confines of the
`MSA and what are generally accepted business standards. The MSA provisions govern, are valid and are clear with
`respect to the lawfulness of MS’ conduct.
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`Based on the foregoing, all of HW’s claims are denied.
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`The administrative fees of the American Arbitration Association (AAA) totaling $3,150.00 shall be borne as
`incurred, and the compensation of the arbitrator totaling $6,250.00 shall be borne as incurred.
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`This Award is in full settlement of all claims submitted to this Arbitration. All claims not expressly granted herein
`are hereby denied.
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`7/13/2021
`____________________
`Date
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`/s/ Myrna Barakat
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`________________________________________
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`Myrna A. Barakat, Arbitrator
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