The recent decision in Federal Trade Commission v. Amazon.com Inc., U.S. District Court, Western District of Washington, No. 2:23-cv-00932-JHC, 2025 WL 1907413 provides a practical look at common challenges organizations face with handling sensitive internal documents and privilege claims. While the decision is from the United States, the key principles underlying privilege are equally applicable under Canadian law.
In this case, the Washington court observed that Amazon’s conduct appeared to be designed to gain a tactical advantage in the litigation and was tantamount to bad faith, but the reality is that many organizations struggle with the same privilege issues as Amazon—not due to intentional misconduct but due to misunderstanding the legal requirements to claim privilege.
Using the Amazon FTC case as a case study, here are three surprisingly common approaches to handling internal privilege claims, why they don’t work, and what to do instead.
1. Use of blanket “Privileged and Confidential” markings
What happened in the Amazon case:
Amazon employees routinely marked sensitive internal business strategy emails and operational discussions with “privileged and confidential” headers regardless of whether the documents contained legal advice or were created for the dominant purpose of litigation. For example, an Amazon non-lawyer employee stated in an email that documents should be marked “P&C because of the subscription clarity issues”. The same Amazon non-lawyer employee also told another non-lawyer employee to mark as privileged and confidential “[a]nything involving accidental/uninformed sign ups... customers settling without realizing it due to auto-renew...”.
Why This Doesn’t Work:
Marking documents as privileged and confidential does not create privilege protection where none exists legally. Courts examine the actual content and purpose of communications, not just their labels.
Privilege is not created or assumed based on such factors as their general subject matter or where documents are stored (e.g., in legal files).
Business sensitivity and legal privilege are entirely different concepts. Simply because a matter is sensitive does not create an assumption of legal advice or anticipated litigation where none exists in fact.
The Better Approach:
Only mark documents as privileged when they actually contain confidential communications between lawyer and client made for the purpose of seeking or providing legal advice or which were created for the primary purpose of existing or reasonably anticipated litigation.
Train employees on:
- the three primary privileges (solicitor-client, litigation, and settlement privilege);
- when “privileged and confidential” markings are appropriate; and
- what such markings actually accomplish legally.
If litigation is reasonably contemplated or anticipated, get in front of the issue by maintaining distinct streams and separate repositories for operational incident responses and privileged legal risk assessments or reports. Structure internal investigations carefully through lawyers and clearly document the legal purpose of the investigation.
Avoid mixing documents that would be prepared in the ordinary course or would have needed to be prepared regardless of anticipated litigation with the legal documents prepared for the dominant purpose of litigation. Create two versions of reports if necessary—one prepared for the dominant purpose of litigation and one prepared in the normal course (for example, to satisfy mandatory regulatory disclosure or business improvement initiatives).
2. Adding lawyers to threads to “make it P&C”
What happened in the Amazon case:
Amazon employees included legal counsel on primarily business-focused communications, then marked the entire communication chain as privileged. The court found Amazon copied in-house lawyers on routine business emails where no legal advice was being requested or given presumably to create an appearance of legal consultation.
Why This Doesn’t Work:
The mere presence of lawyers does not create privilege protection for business discussions. Nor does it create an assumption that (i) legal advice is being requested or given (when substantively this is not the case), or (ii) litigation is being contemplated (such that protection may be claimed under litigation privilege).
If internal legal counsel is being included in communications or meetings to keep them in the loop but no legal advice is being requested or given at that time (and litigation is not being discussed), or if the lawyer is simply part of the business team involved in considering a matter, chances are there is no claim to privilege.
The Better Approach:
Beyond training employees on privilege and providing regular refreshers, the safest approach is to assume that anything they put in writing can and will become public and to communicate accordingly.
Limit distribution of privileged materials to those with a legitimate need to know. If every sensitive email includes a lawyer and is automatically labelled “privileged and confidential”, it can undermine genuinely privileged communications that were appropriately labelled and create confusion when documents need to be reviewed and produced as part of a dispute.
3. Claiming privilege over business communications sent to legal after-the-fact
What happened in the Amazon case:
In a variation of the above example, Amazon would forward business communications to legal departments and then claim the forwarded versions (including the entire chain) were privileged even where the documents contained no legal advice and did not concern litigation.
Why This Doesn’t Work:
Documents cannot be “made privileged” retroactively by sending them to a lawyer. Simply sending business communications to the legal department does not transform them into privileged solicitor-client communications if they were not privileged to begin with.
If business communications are forwarded to legal and legal advice is sought at that time, that request for advice and the response will be privileged—but the original communication would not be.
The Better Approach:
Again, the safest approach is to assume that anything in writing can and will become public and communicate accordingly and carefully.
There is no way around the need to educate employees on what is truly privileged and protected and what is not and to provide regular training underscoring that sensitive business information or business strategy discussions cannot be shielded through privilege claims where privilege does not otherwise exist so that communications can be prepared with that in mind.
Conclusion: Practical lessons and takeaways
Handling privilege claims properly isn’t just about legal compliance, it’s about maintaining credibility with courts, regulators, arbitrators and opposing parties. The cost of getting it wrong can be measured not just in additional discovery time and monetary sanctions, but in reputational harm, damaged credibility with decision makers and altered dynamics between the disputing parties, which can influence litigation strategy and settlement negotiations.
The Amazon FTC case serves as a valuable and timely reminder of several critical rules about privilege that are equally applicable under Canadian law. To summarize the top takeaways:
- Adding lawyers to email threads does not “make it P&C”. The mere involvement of legal personnel does not create privilege protection.
- Privilege cannot be created after-the-fact by forwarding the document to a lawyer or storing it in a legal file.
- Taking shortcuts of any kind with privilege claims (e.g., making blanket privilege claims or marking documents as privileged and confidential as a default) is a risky document handling strategy.
- Substance matters more than labels: Courts will examine the actual substance of communications rather than how they’re marked or categorized or stored.
- A safe approach is to assume that anything in writing can and will become public and communicate accordingly and carefully. Just because something is sensitive and/or confidential does not mean litigation is reasonably contemplated or that legal advice has been sought or given.