Adds Amazon comment in paragraph 4

By Mike Scarcella

WASHINGTON, July 10 (Reuters) - Amazon.com AMZN.O has agreed to a class action settlement that would allow U.S. consumers to pursue more than $200 million in damages from third-party software developers tied to alleged illegal gambling transactions on apps offered through the e-commerce giant’s online marketplace.

The proposed settlement was filed on Thursday in the federal court in Seattle and requires a judge’s approval. It would resolve a class action filed in 2023 alleging Amazon violated a Washington gambling law and the state's consumer protection act by brokering transactions in social casino apps available through the Amazon Appstore.

The deal does not require Amazon to pay into a settlement fund. Instead, the company would agree to a $201 million judgment being issued against it and to assign to the class its rights to seek reimbursement from casino app developers. Class members would agree not to collect the judgment from Amazon as part of the deal.

Amazon, in a statement welcomed, the settlement and said it will allow the company to "continue offering choice in our Appstore while requiring developers to make changes that improve the customer experience." Amazon said apps within its Appstore "must comply with applicable laws, and we retain the ability to remove any app at any time.”

Lawyers for the plaintiff, a social casino app user, did not immediately respond to requests for comment. Amazon has denied any wrongdoing.

In court documents, attorneys for the plaintiff described the settlement as the latest chapter in their campaign against the social casino industry. They said earlier settlements with app developers have returned more than $650 million to consumers in Washington and across the country.

“The class is poised to recover a significant portion of their total losses that keeps pace with the settlements achieved against the social casino developers,” the lawyers said.

The $201 million so-called covenant judgment against Amazon represents 30% of class members' spending on the apps, the plaintiff said.

The amount was calculated using transaction data that Amazon produced in the litigation for in-app purchases made by class members, the plaintiff said. Any money recovered from developers would be distributed to class members.

Parallel cases are pending against technology companies Apple, Google and Meta, which have all denied any wrongdoing.

The case is Steven Horn v. Amazon.com Inc, U.S. District Court for the Western District of Washington, No. 2:23-cv-01727-RSL.

For plaintiff: Todd Logan of Edelson and Cecily Jordan of Tousley Brain Stephens

For defendant: Charles Sipos of Perkins Coie

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