Amazon has quietly reinstated a policy that prevents most customers from taking the company to court, reverting to a mandatory private arbitration agreement and a class-action waiver. The change, which took effect on August 14, means that by continuing to use Amazon's services, customers agree to resolve disputes through individual arbitration rather than in court or through collective lawsuits.
The move has ignited significant backlash online, with customers expressing outrage over what they perceive as a unilateral change to the terms of service. Many question the legality of such a policy, with some Reddit users describing Amazon as a monopoly wielding undue power.
Under the updated terms, customers must first attempt to resolve disputes directly with Amazon. While small claims court remains an option, customers generally forfeit the ability to bring most disputes before a judge and jury or to participate in class-action lawsuits. The only explicit way to opt out of the new terms is to cease using Amazon services altogether.
Lawsuits filed before August 14 generally proceed under the old rules. This includes a class-action lawsuit filed in late July in federal court in Seattle, which accuses Amazon of misleading consumers by marketing seafood as environmentally friendly and sustainable. The suit alleges that Amazon used labels such as 'dolphin safe,' 'responsibly sourced,' 'sustainable,' and 'wild caught' without substantiating these claims, potentially deceiving shoppers about the environmental impact of its seafood products.
Amazon states that the new policy offers customers a "fast, cost-effective" dispute resolution method while retaining the small claims court option. However, the company's decision to reintroduce mandatory arbitration is notable given that Amazon itself abandoned the practice five years prior. In 2021, the company was inundated with approximately 75,000 arbitration claims from customers alleging that Alexa devices had recorded them without consent. The sheer volume of these claims led Amazon to pay substantial arbitration fees and prompted the abandonment of the mandatory arbitration rule at that time.
The company's updated terms include provisions for "mass arbitration," where 25 or more arbitration cases involving the same issue within six months can be handled in batches. This appears to be a measure to prevent a repeat of the overwhelming volume of claims experienced in 2021.
The immediate effective date and the method of notification—via email with continued use of services implying agreement—have also drawn criticism, as companies typically provide more advance notice for significant terms of service changes. The shift to private arbitration means disputes and settlements are less likely to become public record, raising concerns about transparency when allegations of widespread wrongdoing arise.