SquareTrade

The Company

Founded in 1999 and with over 60 full-time employees in the 2000s, SquareTrade is based in San Francisco, Califorina (United States).The company provided online dispute resolution (ODR) services for e-commerce businesses to solve complex online disputes. He was the leader in this sector.

SquareTrade Online Dispute Resolution Service

The SquareTrade Seal and dispute resolution service was previously offered to several platforms and market places, including eBay. In 2008 was being offered to eBay buyers and sellers and Onvia.com small business customers. In addition, any online entrepreneur or business was able to apply for the SquareTrade Seal, for display on a Web site or auction posting. The Seal helped build buyer confidence and represents a seller’s pledge to providing a better level of customer service, and to using SquareTrade’s Dispute Resolution Service and technology should a dispute arise that cannot be handled via normal customer service channels.

SquareTrade tried to addresses the issue of building trust in online business relationships, which was essential to increase transaction volumes in e-comerce businesses. The digitally watermarked SquareTrade Seal established an online seller’s customer service track record, serving as a first line of defense against fraud. The Seal was backed by the Company’s patent-pending Internet-based dispute resolution service and international network of 250 mediators and arbitrators.

SquareTrade offered two levels of dispute resolution: assisted negotiation and mediation. SquareTrade was only used after eBay’s own consumer satisfaction process.

Later, SquareTrade continues only providing services to eBay users, such as warranty services and the trustmark program

Online Dispute Resolutin (ODR)

Disputes are an inevitable byproduct of the large number of transactions and relationships fostered by technology.

Ehtan Katsh, in his article ‘Online Dispute Resolution: Some Implications for the Emergence of Law in
Cyberspace’ reviews the history of Online Dispute Resolution. He also identifies that Online Dispute Resolution grew from the need to bring parties together that were separated by great distances.

The author analyzes of the relations between the virtual community of the Internet and its online dispute resolution process. He holds that cyberspace constitutes an independent and integrated environment which generates its own rules. The evolution of norms in cyberspace seems to be the consequence of the many interactions between actors, without any fundamental legislative inventions from states.

ODR History

Katsh traces the evolution of online dispute resolution mechanisms, mainly in the sector of electronic commerce since the early 1990’s. The rapid growth of commercial relationships on the Internet brought about an increase in the number and magnitude of disputes in that sector. In such disputes, online dispute resolution mechanisms offer users much more flexibility and ease of access than traditional methods of conflict resolution. It is in that context that was developed the “Squaretrade”system to facilitate conflict resolution between “E-Bay” users. The “Squaretrade”system presented the significant advantage of framing and standardizing the general and specific issues of the conflict. The author holds that the main function of that system is to organize and manage the communications between the parties. This system thus preserves the “fourth-person paradigm”necessary for the proper resolution of trade disputes. Furthermore, as an integral part of the software, the “Squaretrade”system offers an appealing alternative to formal legislative rules. Katsh states that this phenomenon raises important questions about the process of creation of norms and their acceptance by citizens.

Legitimacy

In the context of online conflict resolution process, this legitimacy must be recognized by the parties and by the general population. However, the needs of the parties in the conflict are generally largely different than those of the population. Katsh thus illustrates how certain online dispute resolution mechanisms are unable to generate such legitimacy, while others become internationally recognized institutions. To develop legitimacy, online dispute resolution mechanisms must build their own normative values. Thus, one can see that online dispute resolution mechanisms are challenging the traditional model of norm formation and can be considered as fundamental elements of an innovative normative environment.