Amazon made a profound change to its terms of use without prior notice, paving the way for class action against the company. The group is likely reacting to a torrent of individual lawsuits regarding Echo devices powered by Alexa.
Since higher payments are usually due due to missing group actions compared to individual actions, many companies – including Amazon until now – have blocked this option in their terms of use.
Instead, customers and employees only have the option to file a claim outside the traditional court system in so-called arbitration courts. The highest court in the United States, the US Supreme Court, has repeatedly upheld this process, thus strengthening corporate rights.
How is that Wall Street Journal You mentioned, Amazon recently changed the relevant section in the Terms of Use without prior notice. The background has likely recently inundated Amazon with more than 75,000 individual arbitration lawsuits. The procedural fees alone, which arose from this and which Amazon has to pay according to its own guidelines, is in the double-digit million range.
Complaints revolve around the claim that the company’s Alexa-powered echo speakers are recording users without permission.
Amazon’s stake has not yet reacted to the change in terms of use. The shareholder also remains optimistic about the company.
