Judge Denies Amazon’s Bid to Dismiss FTC Lawsuit Over Prime Membership Practices

A U.S. judge in Seattle on Tuesday rejected Amazon.com’s request to dismiss a Federal Trade Commission (FTC) lawsuit alleging that the retail giant enrolled millions of consumers into its paid Amazon Prime service without their consent.

The FTC filed the lawsuit in June 2023, accusing Amazon of engaging in deceptive practices, per Reuters. The agency argued that Amazon made it difficult for customers to cancel their Prime memberships and was aware that a percentage of consumers unintentionally signed up for the service. According to the FTC, some consumers were charged for multiple months before managing to cancel their subscriptions.

Amazon contended that it “prominently and repeatedly” disclosed key terms, including the price and automatic renewal conditions, to Prime customers. The company also accused the FTC of attempting to penalize it based on “undefined concepts” such as “manipulative” website designs. However, Judge John Chun found these arguments insufficient to dismiss the case, allowing the FTC’s claims to proceed.

In an emailed statement, an Amazon spokesperson shared a statement on the case:

“The FTC’s claims are false on the facts and the law. The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership. As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the opportunity to present the real facts in the case.”

Related: Arizona Attorney General Files Suit Against Amazon Over Unfair Business Practices

The FTC accused Amazon of using “manipulative, coercive or deceptive user-interface designs known as ‘dark patterns'” to trick consumers into enrolling in automatically renewing Prime subscriptions. The FTC is seeking civil penalties and a permanent injunction to prevent future violations. This lawsuit is part of the Biden administration’s broader efforts to regulate and enforce rules against major technology companies.

In a related matter, the FTC filed another lawsuit against Amazon in September, alleging that the company violated U.S. antitrust law by restricting merchants from offering lower prices than those available on Amazon’s platform. This case is also pending in Judge Chun’s court, with a trial scheduled for October 2026.

The FTC noted that Amazon, “under substantial pressure” from the agency, modified its Prime cancellation process in April, prior to the lawsuit being filed. Despite these changes, the complaint highlighted that Amazon still requires five clicks on a desktop and six on a mobile device for consumers to cancel their Prime memberships.

Source: Reuters