The Supreme Court upheld this legal tactic because companies successfully argued that they would ensure that arbitration was fair to consumers, including agreeing to pay most of the fees associated with the process. But in the end, very few people used the arbitration system.
Daily Business Briefing
In Amazon Alexa cases, attorneys representing clients have turned this consumer-friendly aspect of the arbitration system in their favour. The strategy is by making mass claims, leaving Amazon a huge legal bill even before any lawsuits are resolved. Just hiring the referee and starting the process for a single claim cost Amazon about $2,900.
“For most companies, arbitration has always been part of an effort to avoid liability, not just to evade class action,” said Travis Lenkner, attorney for Keller Lenkner firm, which represents consumers in Alexa-related claims. “This is the first company to turn its tail. Others can do it too.”
Keller Lenkner’s used a similar approach When questioning how the food delivery service DoorDash classifies and compensates its employees. When the firm filed thousands of arbitration proceedings on behalf of DoorDash employees, it unsuccessfully argued in court that it should not pay most of the starting fees for the lawsuits. DoorDash was reprimanded by a federal judge for saying it was an effort to evade the arbitration system.
Customers claim that Amazon devices, including the Echo, are breaking rules in states that must allow people to register.
About Alexa claims and other arbitration cases, Keller Lenkner’s lead attorney, Warren Postman, said, “Looking at the matter, we’re convinced that most people don’t realize that smart speakers are recording them.”