Amazon Faces Federal Trial Over Prime Sign-Ups and Cancellation Practices
A federal trial has opened in Seattle to determine whether Amazon misled customers into signing up for its Prime service and intentionally made it difficult to cancel. The Federal Trade Commission (FTC) filed the lawsuit in 2023, alleging more than a decade of violations of the Restore Online Shoppers’ Confidence Act, including claims that millions of customers were enrolled in Prime without their knowledge or consent. Prime, which costs $139 annually or $14.99 monthly, offers faster shipping, streaming, and Whole Foods discounts, and is a critical revenue stream with more than 200 million members worldwide.
The FTC argues that Amazon’s enrollment and cancellation practices were deliberately opaque, citing an internal reference to the cancellation process as “Iliad,” likening it to a drawn-out siege. Customers had to navigate multiple confirmation screens to cancel, and employees reportedly described the issue as an “unspoken cancer” within the company. U.S. District Judge John Chun ruled that the Restore Online Shoppers’ Confidence Act applies to Prime and barred Amazon from using certain defenses, but left it to a jury to decide whether disclosures were sufficiently clear and whether cancellation met the legal standard of being “simple.”
Three top Amazon executives—Neil Lindsay, Jamil Ghani, and possibly Russell Grandinetti—face potential personal liability if the jury rules in favor of the FTC. Amazon, however, maintains that its practices are fair and transparent, stating in a trial brief that “occasional customer frustrations and mistakes are inevitable” but do not prove wrongdoing. The trial comes amid broader antitrust scrutiny of Amazon under FTC Chair Lina Khan, as the agency also pursues a separate case accusing the company of monopolistic control over online markets.
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