Full Breakdown
Amazon Restores Arbitration Clause, Limiting Class-Action Options for Customers
8/18/2026, 12:02:35 AM
Core Change to Customer Agreements
On Friday, Amazon emailed its users to announce an update to its terms of use that reinstates an arbitration agreement and a class-action waiver. Under the new language, customers must resolve disputes through individual arbitration or, after first attempting to settle the issue directly with Amazon, may pursue claims in small-claims court. There is no opt-out mechanism; the only way to avoid the terms is to stop using any Amazon service. The company said it will cover “most of the cost” of arbitration.
Background and Recent Legal History
Amazon first removed its arbitration clause five years ago after being overwhelmed by roughly 75,000 arbitration claims alleging that Alexa devices recorded conversations without consent. The company later agreed to a $2.5 billion settlement with the Federal Trade Commission (FTC) over allegations that it enrolled customers in Amazon Prime without consent and made cancellations difficult. The deadline for consumers to submit a claim in that settlement passed on July 27.
Official Response from Amazon
An Amazon spokesperson told the Seattle Times that the company regularly updates its conditions of use to better serve customers.
Impact on Ongoing Litigation
The amendment does not affect lawsuits filed before the Friday update; those cases can continue under existing procedural rules. This includes a recently filed class-action lawsuit in Seattle federal court accusing Amazon of falsely marketing seafood products as sustainable. The change also does not bar consumer-protection actions brought by the FTC or other government agencies.
Data Summary
- ~75,000 arbitration claims prompted the original removal of the clause five years ago.
- $2.5 billion FTC settlement for unauthorized Prime enrollments (claim deadline July 27).
- New terms require arbitration or small-claims court, with arbitration costs largely borne by Amazon.
- Existing lawsuits, including the seafood-marketing case, remain viable.
These developments tighten Amazon’s dispute-resolution framework, shifting most consumer grievances from jury trials to individual arbitration while preserving limited avenues for small-claims and government enforcement.
