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Businesses The Courts

Amazon Payment Adds "No Class Action" Language To Terms of Service 147

Posted by timothy
from the you've-been-served dept.
wbr1 writes "I just received an email from Amazon Payments, the Amazon competitor to PayPal, stating among other things, that they were changing and simplifying their policies. It should be no surprise then, that similar to what PayPal and many others have already done, they have added language removing the right to class action lawsuits. See specifically section 11.3 (edited for brevity): '1.3 Disputes. Any dispute or claim relating in any way to your visit to the Site or Seller Central or to products or services sold or distributed by us or through the Site or Seller Central (including without limitation the Service) will be resolved by binding arbitration, rather than in court, except that you may assert claims in small claims court if your claims qualify. The Federal Arbitration Act and federal arbitration law apply to this agreement... ... You and we each agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated, or representative action. If for any reason a claim proceeds in court rather than in arbitration you and we each waive any right to a jury trial. You and we also both agree that you or we may bring suit in court to enjoin infringement or other misuse of intellectual property rights.' This is becoming more and more common, and while the end user normally doesn't make out well in a class-action suit, large settlements do provide a punishment and deterrent to corporations that abuse their power. The question becomes, what do we do to fix this so that consumers are truly protected?"
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Amazon Payment Adds "No Class Action" Language To Terms of Service

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  • by Hatta (162192) on Thursday November 15, 2012 @04:21PM (#41995923) Journal

    So, propose something better instead of simply removing one of the few ways we have to hold a corporation's feet to the fire. If arbitration was better at punishing corporations when they do wrong, they wouldn't be moving to it in large numbers.

  • by surmak (1238244) on Thursday November 15, 2012 @04:24PM (#41995959)

    Without class actions, how can a company be punished for, for example, cheating a million people out of $10 each?

    I suppose that the government could step in, but a class action has the advantage of providing a market-based solution to the problem. A greedy law firm can determine that the payoff will be profitable, and then invest their own resources to punish the offender. The fear of being on the receiving end of a suit helps keep big corporations in line, and this explains why they hate them so much.

  • Re:Why use paypal? (Score:2, Insightful)

    by Frosty Piss (770223) * on Thursday November 15, 2012 @04:33PM (#41996063)

    Local stores are rarely price competitive...

    Amazon, Wal-Mart, and folks like them are only "competitive" because they eat babies and rape third-world teenaged mothers.

  • by Anonymous Coward on Thursday November 15, 2012 @04:39PM (#41996137)

    But they do nothing for the consumer. It's a market solution that benefits lawyers and encourages them to pursue frivolous class actions.

    They pay-out to the consumer is a $3 off coupon and a pat on the back.

    There should be financial punishments for corporations who harm vast swaths of consumers, but I'm not sure class action lawsuits were the solution.

  • by Alain Williams (2972) <addw@phcomp.co.uk> on Thursday November 15, 2012 @04:57PM (#41996337) Homepage

    As others have pointed out the main benficiaries of class action law suits are the lawyers -- who make a lot of money out of them. Many law makers (Parliament/Senate/Congress/...) were lawyers when younger and will remain good friends with those who are still lawyers.They are not going to see their old profession or friends suffer: they will pass legislation to stop these sorts of clauses.

    Cynical ? Moi ?

  • by scot4875 (542869) on Thursday November 15, 2012 @05:06PM (#41996443) Homepage

    But they do nothing for the consumer.

    Sure they do. The threat of a class action suit acts as a deterrent for potential abuse. Without the deterrent, corporations are more likely to try to engage in unethical or illegal behavior if they think it'll make them a buck.

    --Jeremy

  • by pavon (30274) on Thursday November 15, 2012 @05:24PM (#41996599)

    What if I do like the contract, but they break it? Then I go to court to resolve the matter. Oh, wait I can't, I have to go to arbitration, where the result is already determined against me.

    If a contract isn't enforceable by law than it isn't a contract anymore. It is a bundle of official looking lies with no weight. Such a thing is unconscionable. It violates the very foundation of market based societies of law, and is tantamount to fraud.

  • by tlhIngan (30335) <[ten.frow] [ta] [todhsals]> on Thursday November 15, 2012 @05:39PM (#41996713)

    You punish companies by introducing loser-pays, or loser-pays-up-to-the-value-of-their-own-costs. Settling a class-action over 1,000,000 people swizzed out of $10 will be nothing compared to settling 10,000 cases with individuals, each with its own costs bill.

    So out of those 1M people cheated of $10, you expect 1% of them to take the time, effort, and money to sue the company for that $10 back? You do realize that even small claims court requires paying a filing fee (around $20-40) just to file, right? So even if you win, you've gained... $-10 or so. And you lose a day's worth of PTO.

    A smart company would realize that and make sure the amount they cheat people out of is always going to be less than the filing fee. Sure there'll be a few who do so out of principle, but you can bet the numbers would be way less than 1%. And hell, you don't even have to do anything - just wait for the default judgement, pay up and cheat a few more people to pay for it all. Or just bill those people again and let them fight it all out again in small claims. Lose another half day of work and dollars.

    And yes, the company just does... nothing. No expensive person has to show up in court (default judgement is fine). Cost to you - time and money, cost to the company - nothing - it's pure profit that they'll probably extract from you next month when you'll be too tired to keep fighting it.

Our policy is, when in doubt, do the right thing. -- Roy L. Ash, ex-president, Litton Industries

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