Amazon Ends Use of Arbitration for Customer Disputes - The New York Times

Remember when I wrote about law firms that have autimated the process of applying for arbitration, which means that the companies inserting binding arbitration clauses in their terms of service were getting hammered by hundreds or thousands of filing fees?

Many of the most egregious abuses of this process have started to back away from what is now a significant cost, and even corporate Bond villain Amazon has ended the use of arbitration, which would be a win for society even if weren't Amazon that were the loser.

I am amused:

Amazon told customers this week that it would no longer require them to resolve their legal complaints involving the technology giant through arbitration, a significant retreat from a strategy that often helps companies avoid liability.

In a brief email to customers, Amazon said anyone using its products would now have to pursue disputes with the company in federal court, rather than go through the private and secretive arbitration process, which critics say puts consumers at a huge disadvantage.

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Amazon has been hit with roughly 75,000 arbitration claims alleging that devices, such as the Echo, that feature the company’s voice-operated assistant, Alexa, were recording customers without their consent. Amazon faces potentially tens of millions of dollars in fees that it will have to pay the private arbitrators to have those cases heard.

The Alexa-related cases are part of a relatively new tactic that a handful of law firms are using in an effort to upend the fundamental reason most companies include arbitration clauses in their contracts: to prevent customers from pursuing a legal claim.

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To prevent class actions, many companies began inserting language in their contracts that required customers buying services in nearly every facet of life — from renting a car to admitting a parent to a nursing home — to agree to arbitration in the event of a dispute. That meant signing away their opportunity to be part of a class action.

The Supreme Court has upheld this legal tactic, in large part because companies have successfully argued that they would make sure arbitration was fair for the consumers, including agreeing to pay many of the fees. But the upshot was that very few people ever used the arbitration system.

In the Amazon Alexa cases, lawyers representing the customers turned this feature of the arbitration system to their advantage. By filing claims en masse, the strategy left Amazon with a large legal bill even before any cases had been resolved. Just to hire the arbitrator and to get the process started for a single claim cost Amazon about $2,900.

“For most companies, arbitration was always part of an effort to evade liability, not just to escape class actions,” said Travis Lenkner, a lawyer at the firm Keller Lenkner, which is representing the consumers in the Alexa-related claims. “This is the first company to turn tail. Others may well do so.”

Amazon automated warehousing and distribution, and these lawyers automated lawsuits.

The lawyers win, and a huge company loses.

I can't complain.