Amazon has stopped requiring customers to take complaints to arbitration – rather than to court – after tens of thousands of people flooded the company with complaints that the digital assistant Alexa was improperly collecting voice recordings.
Amazon’s Terms of Service, which govern everything from purchasing products from the company’s online store to using its consumer gadgets, now allows customers to bring class actions against Amazon. company in state or federal court. Previously, claimants had to go to arbitration as individuals. All cases must be filed in King County, where Amazon is based, according to rules that were last updated on May 3.
The change follows some 75,000 Alexa-related arbitration claims – almost all of people represented by Chicago law firm Keller Lenkner – in the past 16 months. The cases have likely amounted to tens of millions of dollars in filing fees payable by Amazon, according to the Wall Street Journal, which announced the decision earlier on Tuesday.
The avalanche of litigation followed reports from Bloomberg News and others, describing how Amazon collects data and analyzes the voice recordings picked up by its popular Echo smart speakers.
Amazon, like many large companies, has long insisted on arbitrage. These procedures were intended to unclog the justice system and provide a less costly way to resolve trade disputes. But critics say arbitration can help companies avoid potentially costly class actions and sometimes prevent buyers from holding companies accountable.
The digital assistant Alexa, which powers the Echo smart speakers and a growing range of other gadgets, is involved in the wave of claims against Amazon. Travis Lenkner, the managing partner of the company behind most of the cases, says Alexa stores voice recordings of unintentional parties by default and in some cases violates state wiretapping laws .
Amazon, which did not respond to requests for comment, told the Journal that some claims have been withdrawn or terminated in favor of the company. Lenkner said some 24,000 claims have reached the stage where both parties have paid the initial costs, and in about 3,000 arbitrators have been appointed to hear the cases. The company used online advertising and marketing tools to reach potential applicants.
Amazon says it stores voice recordings to customize and improve its software and that users can delete their recordings from the software.
“Most people, when you tell them that Amazon registers them for these purposes, are very surprised,” Lenkner said in an interview. “Our customers, to describe them as a group, are unhappy with this.”
Keller Lenkner also represents a group of children suing Amazon in federal court for violating wiretapping laws. (This case, which seeks class action status, bypassed Amazon’s arbitration clause because the children themselves had not accepted the arbitration agreements that their parents had accepted as a condition of using the software.)
It’s unclear whether Amazon will revoke arbitration clauses covering other areas of its business. The company has consistently required third-party sellers and its economical delivery drivers to file arbitration complaints as early as Tuesday, although some courts have refused to enforce Amazon’s arbitration requests. A trader, who successfully pursued an arbitration claim after being kicked off the Amazon site, told Bloomberg earlier this year that the process took 18 months and cost $ 200,000 in legal fees.
“It is remarkable that one of the largest companies in the world, faced with real claims under a dispute settlement clause it wrote, takes such an about-face,” Lenkner said.