Amazon quietly changed its terms of service to allow customers to launch lawsuits after receiving a flood of arbitration requests. Under the company’s dispute resolution process, customers’ complaints were previously referred to a secret panel. Companies usually employ these so-called arbitration hearings to avoid potentially adverse court decisions. Amazon is facing three proposed class actions that may result in large payouts to several plaintiffs, including one filed in May accusing it of illegally recording Echo users.
According to reports, the corporation amended its policy after resourceful lawyers overwhelmed it with over 75,000 individual arbitration demands on behalf of Echo consumers. The lawsuits were filed in early 2020 in response to press allegations that Amazon’s Alexa devices were recording users.
Amazon’s attorneys reportedly informed the plaintiffs’ lawyers of the change in its terms of service in May. The company’s original dispute clause stated: “The arbitration shall be conducted by the American Arbitration Association (AAA) under its rules. Including the AAA’s Supplementary Procedures for Consumer-Related Disputes.”
“Amazon and you both agree that any dispute resolution actions will take place solely on an individual basis, rather than as a class, consolidated, or representative action.” The modification reduced a 350-word statement of its arbitration requirement to two phrases.
According to Amazon, some of the claims have been withdrawn or resolved in the company’s favor. It went on to say that its Echo devices only record when they are in use and that consumers can erase the recordings or opt not to have them saved.
The change comes as pressure mounts on Big Tech corporations to discontinue their use of forced arbitration. Earlier this year, an Amazon seller protested to Congress about the company’s unfair strategy of resolving complaints through secret courts. Jacob Weiss told the House Judiciary Committee’s antitrust subcommittee that he spent thousands of dollars on arbitration expenses. He only received a fraction of what he lost. In a report on digital marketplaces last year, House Democrats on the antitrust committee advocated abolishing compulsory arbitration provisions and limiting class-action lawsuits.
Google, for its part, scrapped its mandatory arbitration policy for employees in response to internal criticism. The criticism was about its handling of sexual harassment cases. In 2018, around 20,000 of the IT company’s global employees participated in walkouts in response to the #MeToo movement.
