Let’s say you purchased a pencil case for your kid on Amazon.com. But it turns out it contains lead that’s way over the federal legal limit, and your kid gets sick as a result. You liked Amazon, used it frequently to buy products and even own an Amazon Echo. But now you want to sue the company. There’s just one problem.
Perhaps more troubling: if Amazon ever screws over Alexa users on a large scale, bringing a class-action lawsuit against the company is all but impossible, legal experts say.
“The problem is, the provision we are talking about right now does not allow that, and that’s exactly what Amazon is banking on.”
According to Amazon, “Alexa” refers to Amazon’s Alexa voice services, “which includes Third Party Services, digital content, Software, the Alexa App, and support and other related services.” But what’s more insidious is buried in the Amazon.com Conditions of Use, which signal an even more expansive reach for this arbitration clause (emphasis ours):
“Any dispute or claim relating in any way to your use of any Amazon Service, or to any products or services sold or distributed by Amazon or through Amazon.com will be resolved by binding arbitration, rather than in court, except that you may assert claims in small claims court if your claims qualify. The Federal Arbitration Act and federal arbitration law apply to this agreement.”
According to legal experts, this clause doesn’t just apply to individual claims, but to class-action lawsuits, meaning Amazon customers can’t join together in a suit against the company. In an instance in which Amazon is engaging in misconduct that impacts millions of its users – like, for example, if it were spying on them – users are legally, for lack of a better term, fucked.
“This is an incredibly broad arbitration clause, and what it’s seeking to do is basically take this one transaction involving Alexa and to have the arbitration clause cover anything that you do with Amazon,” Deepak Gupta, an attorney who is also teaching a seminar at Harvard Law School on forced arbitration, tells Gizmodo. “I think it’s particularly troubling because Amazon is this company that is involved in virtually any kind of consumer product or service you can think of, they are in that market or expanding into it.”
Here’s another hypothetical: Evidence comes to light revealing that Amazon is listening to all of us through Alexa. And not just an alleged “extremely small sample of Alexa voice recordings,” but an active network of millions of home surveillance machines that are always listening, invading our privacy. It would be an unprecedented modern case of corporate spying, but since most people impacted by the privacy invasion downloaded the Alexa app and agreed to its terms of service – which, if they wanted to use the device, they most certainly did – they wouldn’t be able to collectively bring Amazon to court thanks to the terms of service.
Jason Fuiman, an attorney whose practice specialises in labour law and who often represents unions and employees in arbitrations against employers, tells Gizmodo that in the case of a proven wide-scale Alexa privacy violation, someone would likely want to bring a case against Amazon. But it would be difficult for just one person to find an attorney willing to bring the case against Amazon, Fuiman says. If an attorney could get a million people to join a class-action, however, that would be worthwhile because it could have a consequential impact on the company.
“The problem is, the provision we are talking about right now does not allow that,” Fuiman says, adding, “and that’s exactly what Amazon is banking on.”
Ira Rheingold, executive director at National Association of Consumer Advocates (NACA), paints a similar hypothetical, imagining an incident in which Alexa has a glitch, allowing illegitimate access to your phone book, email address, or even your bank account. Thousands of people are affected by this privacy violation, but because of Alexa’s fine print, they would each have to bring their individual claim in front of an arbiter. “As we both know, Amazon’s got a shitload of money,” Rheingold says, “and finding attorneys willing to bring individual consumer cases against Amazon in arbitration is going to be really hard to do.”
Amazon did not respond to Gizmodo’s multiple requests for comment.
Beyond the hypothetical scenario detailed above, there is a litany of potential disputes and claims that the forced arbitration clause extends to – it’s not limited to issues related to the voice assistant, experts say. I ask Fuiman whether downloading the Alexa app and agreeing to the terms of service would mean that pretty much any dispute I have with Amazon, even outside of Alexa, is going to be forced into arbitration. “Correct,” he says. It could apply to Alexa, products purchased on Amazon.com and could potentially apply to data breaches involving Amazon’s cloud business.
Because Amazon’s reach is so expansive, its use of mandatory arbitration in customer agreements is all the more problematic, Fuiman says. But it’s not alone forcing users to agree to arbitration. According to the NACA, hundreds of millions of consumer contracts include some type of arbitration clause in their terms of service, including Facebook, Netflix, Spotify, and countless others.
“One of the questions about all of this stuff is, who agrees to it, right?” Rheingold says. “No one is actually agreeing to arbitrate. It’s this mythology that’s been created about this because they’ve got all the power, because they drafted the contract, because these terms are hidden. You’re not really agreeing, but in most instances courts are going to say, yeah you’ve agreed.”
Due to Amazon’s wide saturation in American life, legal experts we spoke with say we need federal intervention into how these disputes are settled. We are already seeing progress in Congress when it comes to forced arbitration in the workplace, but employment disputes are a different beast than consumer disputes, and as we can see with Alexa’s Term of Use, the breadth of their application can be unsettling, and the ease with which you give up these rights is as simple as checking a box, likely without most people ever knowing what we’ve signed away.
“As corporations get bigger and bigger and bigger, all of them are going to clearly take advantage of these types of clauses,” Fuiman says, “and we are going to lose a lot of the policing mechanism that we’ve come to sort of rely on, which is these large class-action cases.”
There is one way in which Amazon could own itself with this shady clause, as we recently saw with Uber.
“As we both know, Amazon’s got a shitload of money, and finding attorneys willing to bring individual consumer cases against Amazon in arbitration is going to be really hard to do.”
Amazon’s Condition of Use does state that the company will reimburse filing, administration, and arbitrator fees “for claims allotting less than $10,000 unless the arbitrator determines the claims are frivolous.” For a few cases, that’s chump change for the $900 billion company. But if tens of thousands or millions of people bring legitimate cases forward, then the costs really start to add up to something impactful.
Using this mechanism is not technically a class-action lawsuit, but it’s an effective loophole for people to meaningfully impact the company without going against the arbitration clause. It’s a way in which people can work around the limitations of this agreement, pursuing collective action in a less conventional way – one that might have the company rethinking its unjust consumer practice. It happened with Uber, and in the event of a great Alexa scandal, who is to say it can’t happen with Amazon?
In the meantime, Amazon continues to seep into our daily lives through its ever-expanding reach, and forced arbitration affords the tech giant (and many other massive companies like it) the ability to evade a system of power created to hold them accountable. It’s what Gupta characterises as a “one-two punch” of both forcing people to settle these disputes on their own without the ability to band together, as well as keeping the issues hidden from the public. “A lot of wrongdoing and harmful practices get protected or suppressed as a result of that,” he says.
The widespread use of binding arbitration further illuminates the discrepancy of power between colossal corporations and the consumers that have come to rely on them. “Amazon is something everybody uses,” Rheingold says. “And either you are stuck with not having real access to justice when you use an Amazon product, or you don’t use Amazon. And in the world we live in today, that’s becoming harder and harder.”