Amazon Brings Back Arbitration Clause to Shield Against Class-Action Lawsuits

Amazon has reinstated a clause in its user agreement that prohibits customers from filing class-action lawsuits against the company. The move aims to give Amazon greater legal protection against plaintiffs' attorneys, according to an email sent to customers on Friday.

The new 'arbitration agreement and class-action waiver' will require shoppers to resolve disputes outside of courts, but they can still file small-claims cases that typically limit damages to a few thousand dollars. The changes are effective immediately, and customers agree to the terms by continuing to use the company's services.

This is not Amazon's first encounter with class-action lawsuits. The company has battled such claims over issues like unsafe products and allegedly making it hard to cancel Prime memberships. However, plaintiffs' attorneys could still seek class-action lawsuits against Amazon, and a judge would determine if the user agreement prevents them from doing so.

Amazon spokesperson said in an emailed statement 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.' The company's second-quarter results showed net sales of $200.6 billion, a 20% increase year-over-year.