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Amazon tricked millions of people into signing up for its Prime subscription plan, the Federal Trade Commission alleges in a trial that begins Monday in Seattle. The commission filed the lawsuit in 2023, accusing the online retail giant of using deceptive designs in its user interface to deceive consumers and make it difficult to cancel subscriptions.
This is one of two lawsuits the FTC brought against the company.
What does the FTC allege?
Unbiased. Straight Facts.TM
More than 200 million people in over 20 countries signed up for Amazon Prime in 2024.
The FTC said Amazon spent years enrolling customers into Prime memberships without their consent and made it difficult for consumers to cancel subscriptions. Authorities said the company did this knowingly and used “dark patterns” to trick customers into automatically renewing subscriptions.
The lawsuit also claims the primary purpose of Amazon’s cancellation process wasn’t actually to cancel memberships but to stop consumers from canceling. The FTC said leadership at Amazon slowed or rejected changes that would have made it easier for users to cancel memberships.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” former FTC Chair Lina M. Khan said in a 2023 press release.
Why is this case critical?
According to The Verge, this is the first major case against Amazon by the U.S. government in recent memory.
U.S. District Judge John Chun, who is presiding over the case, gave the government a big win last week. Chun ruled Wednesday that Amazon violated the Restore Online Shoppers’ Confidence Act (ROSCA) by collecting customers’ billing information before it disclosed the terms of Prime memberships. He also said two Amazon executives should be held personally liable if the FTC can prove the violations during trial.
ROSCA requires sellers to get informed consent from consumers before they charge them.
How has Amazon responded?
Amazon officials have denied the FTC allegations. In 2023, spokesperson Heather Layman called the claims false and said users love Prime, according to The Verge. Layman also noted that Amazon made it “clear and simple” for customers to sign up and cancel memberships.
However, in 2022, the company agreed to simplify its cancellation process in Europe following pressure from regulators. Amazon has also created a cancellation page that shows members options on how to cancel or pause their Prime membership.
Both Republicans and Democrats have gone after recurring subscription fees. Khan, who led the FTC during the Biden administration, pushed for easy ways to cancel subscriptions. However, an appeals court struck down her “click to cancel” rule in July.
President Donald Trump’s FTC chair, Andrew Ferguson, opposed Khan’s rule, but he has continued her lawsuit against Amazon.
The post Jury selection begins for FTC’s lawsuit against Amazon Prime cancellations appeared first on Straight Arrow News.
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Author: Alan Judd
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