Amazon Breached Consumer Protection Law, Judge Rules

US District Judge John Chun ruled that Amazon breached consumer protection laws by gathering the billing information of would-be Prime subscribers before disclosing its terms of service. This ruling puts Amazon at a disadvantage in an ongoing deceptive practices case brought by the Federal Trade Commission (FTC).

The FTC filed its complaint against Amazon in 2023, arguing that Amazon “knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime. Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions.” According to the FTC, Amazon’s actions violated the Restore Online Shoppers’ Confidence Act (ROSCA).

According to the FTC, the online marketplace giant signed up millions of customers for its Prime service without their consent, and stopped millions of cancellation attempts through complex or manipulative methods.

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said FTC Chair Lina M. Khan.

Regarding the September 18 decision by Chun, head of the FTC’s bureau of consumer protection, Chris Mufarrige said: “Today’s decision affirms that Amazon defrauded American consumers by failing to disclose all terms of Prime before collecting consumers’ payment information.”

Chun also ruled that two Amazon executives were liable for any violations the FTC proves at trial and denied Amazon the right to argue that ROSCA does not apply to Prime sign-ups.

Regarding the decision, a company spokesperson told media outlets: “The bottom line is that neither Amazon nor the individual defendants did anything wrong,” adding that “We [Amazon] remain confident that the facts will show these executives acted properly and we always put customers first.”

While the ruling is an early victory for the FTC, the trial could still go either way. Earlier this year, the US Court of Appeals blocked a proposed rule by the FTC that would have required online providers to make canceling a service as easy as signing up for it.