Amazon Revives Binding Arbitration for Disputes

Amazon has quietly updated its terms of use to discourage customers from taking disputes to court. The move effectively brings back binding arbitration, which allows Amazon and users to waive their right to a class action suit. This change comes after the company removed binding arbitration in July 2021, following a mass arbitration of roughly 75,000 claims against Alexa's unauthorized recording of customer conversations.

The new terms require customers to first talk to customer service and exhaust other options before entering into binding arbitration. The process will be grouped into batches of 25, 100, and 500 claimants with similar issues, each assigned one arbitrator and administrative fees. This move has raised alarms about the use of forced arbitration clauses in consumer transactions.

Myriam Gilles, a professor at the Benjamin N. Cardozo School of Law, testified that forced arbitration is akin to a 'get out of jail free' card for companies with significant market power, allowing them to shunt cases into private systems where most are abandoned.