Amazon Restores Arbitration Terms for U.S. Customers

Amazon revised its U.S. customer terms on August 14, affecting customers with new disputes and changing how they may pursue claims against the company. Reuters and Bloomberg reported that the terms seek to move most covered cases from public courts into individual arbitration.

What Amazon changed

Arbitration sends a dispute to a private decision-maker instead of a judge or jury in court.

Reuters reported that Amazon notified U.S. customers of an arbitration agreement and class-action waiver that took effect immediately. Amazon treats continued use of its services as acceptance of the revised conditions, according to Reuters.

That is Amazon’s contract position, not a judicial finding that every customer agreed. A customer could later dispute whether an agreement was formed or whether it covers a particular claim.

Related arbitration demands may receive special treatment when at least 25 are submitted within six months, Reuters reported.

What the terms mean for customers

The change could make it harder to combine many similar consumer claims in one lawsuit. A class action allows representatives to pursue similar claims for a larger group when procedural requirements are met.

Under Amazon’s reported framework, most covered customers would instead pursue claims individually. Reuters and Bloomberg reported that qualifying small-claims proceedings remain available.

Amazon said arbitration offers customers a fast and economical way to resolve disputes while preserving the small-claims option, according to both news organizations.

Reuters reported that litigation started before August 14 is excluded from the new arbitration provisions. The change therefore does not dismiss, stay or decide any pending class action.

The terms do not settle enforceability

Amazon adopted contractual provisions; it did not obtain a court order preventing customers from filing class claims. Bloomberg reported that lawyers may still attempt to bring such claims, leaving a court to decide whether the agreement controls.

Federal law generally recognizes written arbitration agreements involving commerce, subject to grounds that can invalidate other contracts. Section 2 itself makes no finding about whether Amazon gave legally sufficient notice to any customer.

As Washington-specific context, state law assigns courts the question of whether an arbitration agreement exists and covers a dispute. Under that law, a court considering an opposed request to compel arbitration must determine whether an enforceable agreement exists.

Why Amazon returned to arbitration

Reuters reported that Amazon removed a comparable consumer-arbitration requirement in 2021. That change followed about 75,000 individual demands involving allegations about Alexa recordings, according to Reuters.

Amazon restored the requirement approximately five years later and added procedures for groups of related arbitration demands. Bloomberg reported that the revised agreement is not necessarily binding and could face future judicial review.

What happens next

The practical effect will become clearer when Amazon invokes the provisions in a new dispute or a customer challenges them. A court may then consider contract formation, the provision’s scope and any applicable defense to enforcement.

Sources

• Reuters: Amazon reinstates binding arbitration, bars class-action lawsuits
• Bloomberg Línea: Amazon’s new provision targeting customer class actions
• 9 U.S.C. § 2 — Validity and enforcement of arbitration agreements
• Washington State Legislature: Title 7 RCW
• TheFirstFile: Class action litigation and Rule 23