Arbitration

Amazon Ends Mandatory Arbitration – Consumer Benefit?

By now every Amazon customer is aware that Amazon has changed its terms of service to remove the pre-dispute arbitration agreement. Many consumer advocates are praising the move, but have they really analyzed the change?

I have represented parties in over 600 securities arbitrations, and a handful of commercial arbitrations. My readers know that I am a fan of arbitration, and know that arbitration is much more efficient than court litigation, and is at least as fair. There are many positives and some negatives, but on balance, most cases are better off in arbitration.

Amazon’s removal of the arbitration provision means that Amazon cannot force a customer to arbitrate her claims. What some commentators are missing is that it also means that the customer cannot enforce Amazon to arbitrate.

And Amazon has made sure of that. Not only can’t you force Amazon to arbitrate, you are agreeing to take all disputes to court….in Seattle Washington.


DISPUTES
Any dispute or claim relating in any way to your use of any Amazon Service will be adjudicated in the state or Federal courts in King County, Washington, and you consent to exclusive jurisdiction and venue in these courts. We each waive any right to a jury trial.

Walk through that scenario. I am sure that most of Amazon’s disputes are under $500.00. You have a dispute with Amazon and want to sue. You will need to hire an attorney in Seattle. I am confident that finding an attorney to represent you in a $500.00 dispute will be nearly impossible. If you are an individual, you can represent yourself and hope that the judge allows you to appear by telephone or Zoom. If not, the economics of the situation force you to drop your lawsuit.

I am not licensed in Washington, so I am guessing here, but there are filing fees, court fees, and probably a multi-year backlog. But you don’t have to worry about getting a jury – you waived your right to a jury trial in the new terms of service.

So what has really been accomplished? I have been saying this for years to those who are opposed to mandatory arbitration. Let’s be realistic. Arbitration cannot happen without both sides consenting. Pre-dispute arbitration agreements accomplish that goal.

Arbitration is more efficient than court litigation, and at least as fair.

Virtually no one gets a jury trial in a civil case in this country, you are fooling yourself if you think you are giving up something and it certainly is not worth fighting over for a $500 suit against Amazon. In Seattle. For $500.00.

Be careful what you wish for.

Mark J. Astarita is a veteran securities attorney who represents investors and financial professionals nationwide in securities investigations and arbitrations. Have a question? Email him at mja@sallahlaw.com or call his office at 212-509-6544.