Amazon is setting itself apart from other businesses again – though, depending on how one looks at it, not in a positive way. During a time when most, if not all, companies have forced their employees and customers to resolve legal matters using alternative means such as arbitration, Amazon has decided to change its terms of service to permit customers to settle legal matters in the most traditional manner – filing lawsuits.
Instead of going through the arbitration process, customers can bring lawsuits against the company individually or via class action for product liability claims. What was the deciding factor that led to Amazon making this decision? This decision came after 75,000 Echo users came together and filed individual arbitration cases against the company.
Issues with Amazon’s products leading to consumer lawsuits
Beginning in 2019, several lawsuits have been filed against Amazon for the privacy violations caused by some of its Alexa-enabled devices. More than 200 million devices – ranging from Echo, Echo Dot, Echo Show, Echo Flex, and Echo Plus – have been discovered to secretly store and record conversations between its users, whether the person is aware of the recording or even interacting with the device. All of the devices contain a microphone-equipped speaker that allows users to interact with the device in many ways, from asking questions to setting commands. Some of the devices, such as Alexa, have the ability to pair with other Amazon and non-Amazon products.
Owners of the devices are alleging that Amazon’s devices are violating privacy rights by permanently recording and storing user information, such as outside conversations with others. This is under the false impression that devices such as Alexa are only listening to and responding to the owner’s demands. Once the owner is done with the device, assume many consumers, the device stops listening; however, that is not the case. Take, for example, a user who assigns a specific word used to command Alexa.
Once the user says that word, Alexa may begin to record the user’s conversation well after the word was used. Even more terrifying, the user may not even issue the specific word but use words that are similar or sound like the specific word used, triggering Alexa to begin recording conversations whether the user spoke to the device or not.
Privacy issues involving children
Unfortunately, adults are not the only victims of privacy violations from Amazon’s devices. In 2019, the Federal Trade Commission was asked by children’s advocates to investigate Amazon over privacy concerns caused by the Echo Dot Kids device. Advocate groups alleged that the device was collecting personal data on children with no parental approval or supervision. Because the parents were incapable of deleting the information, advocates argued that those actions were violations of the Children’s Online Privacy Protection Act (COPPA).
Per the Federal Trade Commission, parents are granted permission under the COPPA to control the information that websites and online services collect on children under 13 years old. Echo Dot Kids is violating that right by collecting information on children and not relinquishing the information even when the parents request it.
Why did Amazon get rid of its arbitration clauses?
Many disputes between companies, employees, and customers are usually resolved through arbitration. Unlike traditional litigation, arbitration cases are handled by a third party instead of a judge or jury. They are usually faster and cheaper than a traditional lawsuit, as well. Instead of both the company and the consumer putting up with the headache of paying attorney fees, filing fees, and being stalled by pretrial discovery proceedings, the company is responsible for the arbitration fees when a consumer files an arbitration case. Although the fees are relatively cheaper, these fees can add up quickly for a company – especially in Amazon’s case, where thousands of arbitration cases have been filed against the company.
Amazon’s decision to change its terms of service from using the arbitration process to filing lawsuits may have been a decision based around self-interest. Amazon is not the only company that has been threatened with mass arbitration cases. Companies such as Uber and DoorDash have been hit with thousands of arbitration disputes from workers. In fact, arbitration is a more favored dispute resolution because of how consumers and employees can use the process to their advantage. In the case of Amazon, however, the company must have concluded that a lawsuit would be less expensive in the long run than settling cases through arbitration.
Updates to Amazon’s conditions of use page
The last date that Amazon’s Conditions of Use Page was updated was May 3rd, 2021. Under the Disputes sub-section, Amazon explains, thoroughly, the process consumers must go through to file a claim against the company. All disputes and claims will now be adjudicated in the state of Federal courts in King County, Washington, and the user must consent to exclusive authority and venue in those courts. In addition to removing the requirement that users agree to the Federal Arbitration Act to use any of Amazon’s services, Amazon also has the ability to waive any right to a jury trial.
Will the changes impact future lawsuits against Amazon?
Certain lawsuits were still able to disregard the arbitration clauses set by Amazon before the change. One such lawsuit was the lawsuit involving the privacy violations of minors. Because the minors did not agree to the terms of service, judges ruled that they did not have to abide by the arbitration agreement. Still, many cases moving forward will be impacted by the removal of arbitration agreements in the terms of service.
The Oklahoma City product liability attorneys at Cunningham & Mears understand how dangerous products can cause injuries. We fight for the right of injured victims to receive compensation from negligent parties. Call our office at (405) 232-1212, or complete a contact form on our website to schedule a consultation today.
Ryan Y. Cunningham is a founding partner of Cunningham & Mears. Mr. Cunningham devotes his practice to protecting the rights of injured Oklahoma residents. In addition to assisting injured clients, Mr. Cunningham endeavors to improve personal injury representation by speaking on issues related to personal injury law to attorneys in continuing legal education courses and to law students. Learn More