Class actions are necessary today more than ever because the executive in my (your) state is conflicted and too beholden to the class defendant to act on your behalf. But thanks to a dumbass (term of art) application of the Fed Arb Act by way of boilerplate "contracts" in consumer matters class actions go away.

It's because a settlement represents the total damages divided among all class members, reduced to account for litigation risk. Would you have bought a PS2 if you knew Sony was going to take out the Linux feature? Maybe a fraction of the people who downloaded the Linux feature to play with it wouldn't have bought a PS2 without it. So you take their $300 in damages, multiplied by the 1,000 people for whom the feature made the sale, divided by the 10,000 people who just played with the feature. Then you discount for litigation risk. Is your class overly broad? Is your economics expert going to get thrown out on Daubert? There's lots of ways for the company to win that don't require it to prove "we didn't do the bad thing." That's how you end up with a $3 settlement.

If a company overcharged me $10 for a product, then as part of the settlement I should get at least $10. The company should also have to pay punitive damages, some of which could be used to pay the lawyers.

Instead we get a system where the total damage amount is often less than the company's profits on their illegal activity. Then lawyers take their fee, and then the remainder is divvied up and everyone in the class to get $1.57.

It is an absurd system: companies get off way easier than they should and customers get screwed even when they win.

The lawyers would love this, because they work on contingency and would get paid more of their clients recover more.

> Instead we get a system where the total damage amount is often less than the company's profits on their illegal activity.

That's because the system is set up to protect the defendant. Absent exceptional circumstances, there are no punitive damages, so the most you can recover is, e.g. the amount of the overcharge. Then it is reduced from there to account for other factors. For example, damages are measured by the wrongful profits, not the total profits. If you sell a $1,000 laptop and make $100 profit, and you've engaged in price fixing, the $100 profit isn't on the table, only the difference between the $1,000 price and the hypothetical price in the absence of price fixing. The defendant's expert then says the price fixing only resulted in prices going up by $3, and the plaintiff's expert says it was more like $50, and the jury picks $5, because jury trials are usually held where the company has a presence and juries don't like to punish local companies. Meanwhile, there is a possibility that you get nothing because of various legal technicalities, which are in themselves justified but in the aggregate create a minefield to recovery.[1] So when the company offers to settle for $4, you jump on it.

[1] It's deeply rooted in the law that defendants should not pay for harms that were not caused by their conduct. So say you're a laptop manufacturer that engaged in price fixing. Plaintiffs present evidence showing that prices went up $50 after the price rigging meetings started. But it just so happens that around the same time a tsunami wiped out DRAM factories in Taiwan. Even if you have executive after executive testify "yeah, we totally were trying to raise prices by entering agreements with competitors," your damages expert can still carry the day by convincing the jury that your price fixing wasn't the culprit and that parts shortages caused by the tsunami were responsible for almost all of the increase in prices.

This seems to misunderstand the concept of settlement.

A settlement is always going to be less than you are entitled to as a matter of right assuming everything you claim is true, otherwise, there's no purpose in settling rather than disputing the claims.

> Instead we get a system where the total damage amount is often less than the company's profits on their illegal activity.

There rarely is illegal activity established on the way to a settlement; yes, you could often get far more if you went to trial and proved illegal activity, but that would always be a significant delay, always add significant expense that might not be covered in a fees award (because costs and attorneys’ fees aren't automatically awarded to winning parties, that’s a separate fight that may or may not be won), and might fail entirely leaving you with nothing at all.

The first part is true, the second part is not, because it assumes zeros in both legal cost and opportunity risk; there is a minor effect regarding PR and precedent as well for companies and organizations.