Amazon Ends Use of Arbitration for Customer Disputes
In the Amazon Alexa cases, attorneys representing clients put this feature of the arbitration system to their advantage. By filing claims en masse, the strategy left Amazon with a hefty legal bill even before all cases were resolved. Simply hiring the arbitrator and initiating the process for a single claim costs Amazon approximately $ 2,900.
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“For most businesses, arbitration was always part of an effort to evade liability, not just to evade class actions,” said Travis Lenkner, lawyer at Keller Lenkner, who represents consumers in claims. linked to Alexa. “This is the first company to turn around. Others may well do.
Keller Lenkner used a similar approach to challenge the way DoorDash, the food delivery service, classified and paid its employees. When the company filed thousands of arbitration claims on behalf of DoorDash workers, the company argued unsuccessfully in court that it shouldn’t have to pay much of the upfront costs for the cases. A federal judge berated DoorDash for what he said was an effort to evade the arbitration system.
In the Alexa-related cases, Amazon has not challenged the charges in court, but told Keller Lenkner in May that it had dropped the arbitration requirements as part of its “terms of service.” Many of Alexa’s arbitration claims are still pending and, according to Amazon, there have been many cases ruled in favor of the company.
Customers say Amazon devices, including the Echo, have broken rules in states where people must give consent to be registered.
“When we looked at the problem, we were convinced that most people don’t realize that smart speakers are recording them,” said Warren Postman, Keller Lenkner’s lead attorney on the claims related to Alexa and other arbitration cases.
Amazon said its Echo technology was intended to detect only a chosen “wake word” or a word that triggers the device. The company said customers can view and delete recordings at any time and choose to never save them.
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