Amazon reinstates binding arbitration, bars class action lawsuits

Amazon on Friday reinstated binding arbitration for its US customers while also barring them from seeking class action lawsuits, making it more difficult for users to address grievances in court.

Previously, Amazon said customers should pursue legal claims in court in Washington state, where Amazon is based. Five years ago, Amazon revoked binding arbitration after facing tens of thousands of costly individual cases.

“We determined that reinstating the arbitration clause will offer customers a fast, cost-effective way to resolve disputes while still giving them the option of going to small claims court,” a spokesperson said.

In 2021, Amazon was flooded with about 75,000 arbitration claims from customers claiming its Alexa service was recording them without their consent. It was part of a tactic some law firms use to overwhelm corporations with arbitration claims, forcing them to pay millions of dollars in fees to start the process and causing administrative headaches.

Amazon said in its new terms that 25 or more arbitration cases relating to the same matter in a six-month period would be considered a “mass arbitration” and would be settled in “batches of at least 25”.

Disputes with Amazon, including class action suits, begun before Friday are not affected by the new terms.