A hot potato: Thinking about taking Amazon to court? That's going to be a lot more difficult from now on for US customers, thanks to the company's updated Conditions of Use, which reinstate mandatory arbitration and prohibit class-action lawsuits.
Amazon notified customers of the changes by email on Friday, the same day they took effect. Continuing to use any Amazon service counts as accepting them. Users received no advance notice.
Under Amazon's revised Conditions of Use, almost any dispute connected to an Amazon service or to products and services sold through Amazon.com must now go through binding arbitration instead of a courtroom. That means there's no judge or jury, and a court's ability to review the arbitrator's decision is limited. Customers can still bring eligible cases in small claims court.
The accompanying class action waiver requires arbitration to take place on an individual basis, preventing customers from joining a class or representative action. It also bars requests for public injunctive relief and other remedies sought on behalf of others.
The change could make claims involving small individual losses much harder to pursue, as the potential payout may not justify the time or cost of bringing a case alone.
Arbitration also takes place privately before a third-party adjudicator, so the dispute and any settlement generally remain out of public view. Amazon claims that the process offers customers a fast and cost-effective way to resolve complaints while preserving the small claims option.
The company has added provisions aimed at dealing with large numbers of similar arbitration filings. If 25 or more demands concerning the same matter arrive within six months, Amazon will treat them as a "mass arbitration" and resolve them in batches of at least 25.
Amazon dropped its previous arbitration requirement in 2021 after around 75,000 customers accused Alexa of recording them without consent. Lawyers filed the cases individually, leaving Amazon facing millions of dollars in initial fees and a sizable administrative burden.
For the last five years, Amazon's terms instead directed customers to pursue claims in courts in Washington state, where the company is headquartered. The new rules reverse that position and apply immediately, although lawsuits and class actions filed before August 14 are unaffected.
Customers and their attorneys can still try to file class actions, after which Amazon can ask the court to enforce its new agreement. Judges have generally upheld corporate arbitration clauses, but a court will ultimately decide whether Amazon's terms block each case.
Amazon makes it harder for customers to sue as new terms block class actions and force arbitration
