Amazon has launched its new “Amazon Key” delivery system which enables packages to be delivered inside of consumer homes. The system provides convenience for consumers, yet it also raises important privacy and security concerns. By accepting the “Key” system, consumers surrender their right to take legal action against Amazon in the courts, agreeing instead to use binding arbitration to resolve claims arising from use of Amazon Key. When evaluating the merits of Amazon Key, consumers and policymakers should consider whether or not the Amazon requirement of mandatory binding arbitration for disputes serves the interests of consumers.
Amazon provides a keyless entry system for consumers who make use of Amazon Key. The system uses a security code-based keyless lock and a video camera which documents all entries. Amazon Key enables authorized delivery personnel to enter homes for the purpose of depositing deliveries. Amazon claims the system will offer greater convenience for consumers and will help them manage their deliveries more efficiently.
The Amazon Key Terms of Service require that all users agree to submit to binding arbitration to resolve all disputes associated with Amazon Key. The Terms of Service incorporate by reference the mandatory arbitration clause which is part of Amazon’s standard Terms of Service. In order to make use of Amazon Key, consumers must agree that they will relinquish their right to use the courts and will instead resolve disputes with Amazon using arbitrators selected by Amazon.
Accordingly, if Amazon delivery personnel cause damage to consumer property or engage in malicious conduct while on the premises (including potentially assault or homicide), the consumers involved have no option other than to raise the issue in an arbitration proceeding effectively controlled by Amazon. This approach places consumers at a significant disadvantage and is unfair to the public.
Amazon Key illustrates the next step in the ongoing erosion of consumer rights caused by the ever-expanding applicability of mandatory arbitration clauses in transactions involving consumers. Mandatory arbitration for consumer claims is unfair to consumers and does not serve the public interest. Use of mandatory arbitration in the consumer context should be carefully regulated and limited by government.