Starting Monday, a legal case against Amazon will address allegations that the company misled consumers regarding the sign-up and cancellation processes associated with its Prime membership. This claim is centered on alleged violations of Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which requires sellers to obtain informed consent before charging consumers. The FTC contends that Amazon used techniques referred to as “dark patterns” to encourage users to enroll in Prime subscriptions without fully understanding the implications. Additionally, the FTC claims that Amazon created obstacles for customers attempting to cancel their subscriptions, and delayed implementing changes that could facilitate cancellation, affecting the company’s revenue.
In a prior ruling, Judge John Chun found in favor of the government, determining that Amazon indeed violated ROSCA by collecting customers’ billing information prior to disclosing the important terms of the Prime membership. Judge Chun also indicated that two Amazon executives could face personal liability if the FTC can substantiate its claims in court. Previous remarks from Chun included criticism of Amazon for allegedly withholding documents from the FTC, interpreting this action as “tantamount to bad faith.”
Amazon has countered these allegations, with spokesperson Heather Layman stating that the claims are “false on the facts and the law,” asserting that the company makes the sign-up and cancellation processes straightforward for customers. In 2022, in response to European regulatory pressures, Amazon agreed to simplify its Prime cancellation process.
The issue of recurring subscription fees has garnered bipartisan attention, with efforts to facilitate easier cancellation processes being championed in recent FTC initiatives. Current FTC Chair Andrew Ferguson, while opposing a specific click-to-cancel rule in the past, continues to support the ongoing lawsuit against Amazon, as well as other actions related to subscription practices.
Source: https://www.theverge.com/policy/782197/amazon-prime-ftc-consumer-protection-trial