Amazon reinstates binding arbitration, bars class-action lawsuits

Amazon announced on Friday that it has reinstated binding arbitration for U.S. customers, effectively barring them from pursuing class-action lawsuits. The changes, which take effect immediately, require customers to agree to the terms by continuing to use Amazon’s services. Previously, Amazon had directed customers to pursue legal claims in court in Washington state, where the company is headquartered. Five years ago, Amazon revoked binding arbitration after facing tens of thousands of costly individual cases. A spokesperson stated that reinstating the arbitration clause will provide a fast, cost-effective way to resolve disputes while still allowing customers to opt for small claims court. In 2021, Amazon faced around 75,000 arbitration claims related to its Alexa service allegedly recording users without consent, a tactic used by law firms to overwhelm corporations with arbitration claims. The new terms define 25 or more arbitration cases related to the same matter within six months as a 'mass arbitration,' which will be settled in batches of at least 25. Courts have typically sided with corporations over terms of service language governing legal recourse. Arbitration cases are resolved privately, meaning disputes and settlements are not made public. Disputes and class-action suits initiated before Friday are unaffected by the new terms. The article was reported by Greg Bensinger in San Francisco and edited by Lisa Shumaker and Rosalba O'Brien.

(Source：Reuters)