Amazon reinstates binding arbitration for U.S. customers

Amazon has reinstated binding arbitration for its U.S. customers, a move that effectively prevents users from filing class-action lawsuits. The policy change, which is effective immediately, applies to all customers who continue to use Amazon's services.

This shift marks a reversal of a policy implemented five years ago when the company moved legal claims to courts in Washington state. The decision follows a period where Amazon faced approximately 75,000 arbitration claims in 2021, largely involving allegations that its Alexa service recorded users without consent. Such high volumes of individual claims are often used by law firms to impose significant administrative and financial burdens on corporations.

Amazon stated that reinstating arbitration provides a “fast, cost-effective way to resolve disputes” while maintaining access to small claims court. Under the new terms, if 25 or more arbitration cases regarding the same issue arise within a six-month period, they will be classified as “mass arbitration” and settled in batches of at least 25.

Because arbitration is conducted privately before a third-party adjudicator, settlements and dispute details typically remain confidential. The new terms do not apply to existing disputes or class-action lawsuits that were initiated prior to the announcement.