Amazon reinstated binding arbitration for its U.S. customers on Friday, barring them from bringing class-action suits against the company. The change took effect immediately, and Amazon told customers by e-mail that continued use of its services counts as agreement, where companies usually give weeks of notice.
Amazon had dropped arbitration five years ago after law firms hit it with roughly 75,000 claims over Alexa recording users without consent, and has since directed customers to Washington state court. Its new terms treat 25 or more claims over the same matter within six months as a mass arbitration, resolved in batches of at least 25. A spokesperson called it a faster, cheaper route that still leaves small claims court open. Disputes begun before Friday aren’t covered.
A nameless, faceless, dickless Amazon spokesperson said in a statement:
“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.”
Translation:
“We got sued too effectively last time and learned that forcing customers into one-off arbitration where nobody can pool their case is a lot cheaper than letting them sue us as a group.”
Frankly, this should be illegal. There should never exist a contract, under any conditions, that precludes a user or consumer from taking a company to court. Guns and lawsuits are our God-given rights as Americans! USA! USA! USA! But seriously, how dare they?
Remember when Noncompete Agreements were a thing for professions like hair stylists and factory workers, and then former FTC Chair Lina Khan swooped in like a fucking superhero and was like, “NOPE!”? The FTC, under her leadership, attempted to ban nearly all noncompete agreements nationwide with a single rule in April 2024, which would have freed an estimated 30M workers from contracts that mostly served to keep wages down.
Unfortunately, a federal judge in Texas killed that rule before it ever took effect, and the FTC dropped its appeal last September after Andrew Ferguson had taken over Khan’s position.
Anyway, that’s what needs to happen with mandatory arbitration clauses too, on a federal level. To be clear, I have no problem with Amazon, or any other company, offering voluntary arbitration as a pathway to resolving conflicts. My issue is with making it a requirement, and even more so, waiving consumers’ rights to pursue claims as a class, which Amazon’s batching mechanism is designed to prevent.
If arbitration really is faster and cheaper and better for consumers, companies can offer it after a dispute arises and consumers will choose it. If that’s not the case, then we have a right to sue. “Hey, hey, ho, ho, the condition that prevents us from pursuing legal recourse via collective arbitration or class-action lawsuit has got to go!” Okay, well, I’ll keep working on the chant.
