Amazon asks court to force arbitration

By: The VNN Team  //  News Briefs, US News

by Carol Thompson

Retail giant Amazon.com, Inc. has asked the court to bound the plaintiffs in a class action suit to arbitration.

At the center of the case is Amazon’s prime memberships. Earlier this year, Dr. A. Cemal Ekin filed a claim in the U.S. District Court in Seattle alleging that some prices on Amazon Prime-eligible products are inflated. The Amazon Prime subscription program offers free two-day shipping on Prime-eligible products. The suit alleges that  Amazon encourages vendors who use Amazon to ship items to mark up their prices to essentially cover shipping charges.

Filed as a class action, the plaintiffs cite examples including a 12-pack of Callaway Hex Chrome Golf Balls that were available from a third-party vendor for $29.99 with free shipping for Prime customers, while non-Prime members paid $24.99 plus $5 shipping, effectively the same total price.

Amazon filed two motions in the case. The first sought dismissal and the second sought forced arbitration. According to Amazon, every Prime user agrees to its terms, which includes arbitration.

The plaintiffs contend the terms and conditions state, “Any dispute … in which the aggregate total claim for relief sought on behalf of one or more parties exceeds $7,500 shall be adjudicated in any state or federal court in King County, Washington…. [That court shall have] exclusive jurisdiction and venue.”

Image: Kate Hopkins/Flickr

The Prime program requires members to pay an annual fee of $79 in return for free shipping on Prime-eligible products. Amazon also offers the service to members on certain third-party merchandise referred to as Fulfilled by Amazon (FBA).

The lawsuit alleges that Prime members were deceived by the company because of the inflated prices. “The routine inclusion and encouragement of inclusion of shipping charges in the prices of FBA Prime-Eligible items constitutes a breach of Amazon’s promise to Prime Program Members that shipping charges would not be included in the prices of items offered for sale as FBA Prime-Eligible, and violates Amazon’s agreement that shipping would be “free.”

Amazon does not comment on pending litigation.

The plaintiffs are seeking treble damages for Prime members who were affected between October 2007 and February 2011.