Amazon stops using arbitration for customer disputes

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The Supreme Court supported this legal tactic, largely because the companies successfully argued that they would ensure that the arbitration was fair for consumers, including agreeing to pay many of the fees associated with the process. But the result was that very few people have ever used the arbitration system.

Daily company briefing

Updated

July 22, 2021, 12:48 PM ET

In the Amazon Alexa cases, attorneys representing clients have taken advantage of this consumer-friendly arbitration system feature. By filing complaints en masse, the strategy left Amazon with a large legal account even before any case was resolved. Just hiring the arbitrator and starting the process for a single complaint cost Amazon about $ 2,900.

For most companies, arbitration has always been part of an effort to evade liability, not just to escape class action, said Travis Lenkner, attorney at firm Keller Lenkner, who represents consumers in Alexa-related claims. . This is the first company to move on. Others may very well do it.

Keller Lenkner used a similar approach to question how DoorDash, the food delivery service, classified and paid its employees. When the company filed thousands of arbitration requests on behalf of DoorDash workers, the company unsuccessfully argued in court that it would not have had to pay many of the initial fees for the cases. DoorDash was scolded by a federal judge for what he said was an effort to evade the arbitration system.

In Alexa-related cases, Amazon has not fought the charges in court, but told Keller Lenkner in May that it abandoned the arbitration requirements as part of its terms of use. Many of Alexa’s arbitration requests are still pending, and according to Amazon, many of the cases have been resolved in favor of the company.

Customers say Amazon devices, including the Echo, have violated the rules in states where people must give their consent to be registered.

When we looked into the issue, we were convinced that most people didn’t realize smart speakers were recording them, said Warren Postman, Keller Lenkner’s principal attorney on Alexa-related claims and other arbitration cases.

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