Amazon is set to defend its Prime program in a new trial against the US Federal Trade Commission (FTC) in Seattle, which will take around a month.
The case, starting from the selection of a jury and opening statements, is the first major recent trial aimed at Amazon's business practices. It revolves around allegations that the company employed fraudulent methods to enroll customers into Prime and then made it excessively cumbersome to cancel.
The FTC's Charges Against Prime
The FTC contends that Amazon broke Section 5 of the FTC Act and the Restore Online Shoppers' Confidence Act (ROSCA). In the agency's view, Amazon utilized design strategies called "dark patterns" to push or mislead people into signing up for Prime, frequently without giving them a clear choice.
While signed up, users purportedly were presented with a deliberately complex cancellation process, the agency says Amazon refused to make it simpler for fear of declining revenue.
Judge John Chun already gave the government a partial victory, ruling that Amazon defied ROSCA by gathering billing information before revealing key membership terms.
Chun permitted the FTC to seek personal liability claims against two Amazon executives and scolded Amazon for withholding documents as being "tantamount to bad faith."
Amazon's Response to the Lawsuit
Amazon denied the accusations. Spokesperson Heather Layman stated that the allegations were "false on the facts and the law," reiterating that customers "love Prime" and that the company has made both sign-up and cancellation procedures "clear and simple."
Amazon had already changed its Prime cancellation process within Europe in 2022 in response to regulatory pressure.
Wider Regulatory Scrutiny on Subscriptions
The Amazon trial spotlights an increasing bipartisan movement to regulate repeat subscriptions. Previous FTC Chair Lina Khan championed a "click-to-cancel" regulation to allow consumers to terminate memberships as easily as they began them, although it was rejected by a court.
According to The Verge, current FTC Chair Andrew Ferguson, who opposed the rule in its earlier incarnation, has nevertheless pursued the case against Amazon and recently brought a similar lawsuit against Uber in connection with its Uber One subscription service.
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