As many know, a number of corporations determined that the inclusion in their consumer agreement of a provision requiring arbitration on an individual and not class basis would substantially reduce the likelihood that they would defend claims, as the economics seemingly made the prosecution of claims cost-prohibitive given the potential recovery.
However, as this article in Ars Technica explains, “[t]ech-savvy lawyers have begun using digital marketing tools to recruit and sign up thousands—even tens of thousands—of customers to participate in arbitration.” The resulting arbitration fees to the companies, totaling nearly $10 million in one example described by Ars Technica, have caused the entities to rethink the strategy.
Now, according to the article, Amazon, facing 75,000 arbitration demands claiming privacy violations by its Echo devices, has changed its terms of use, replacing the previously mandated arbitration requirement with a provision contemplating a traditional lawsuit.
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