A landmark trial kicked off in Seattle this week that could reshape how online subscription services disclose their terms—and impose heavy penalties for deceptive practices. The U.S. Federal Trade Commission (FTC) is accusing Amazon of misleading millions of Amazon Prime customers by enrolling them without clear consent and making it unnecessarily difficult to cancel.
Here’s what’s at issue, who’s involved, what could happen—and what might be changing for digital consumers.
The FTC’s Case
- The FTC alleges that Amazon signed up approximately 40 million customers for Prime without their explicit consent.
- One key area of contention: Amazon’s use of “free trial” offers and promotional wording like “Get FREE Same-Day Delivery,” which the FTC claims did not sufficiently disclose that choosing those options could enroll customers in the Prime subscription—with recurring monthly fees.
- The agency also argues Amazon’s cancellation process is intentionally convoluted, including using multiple screens to dissuade people from quitting. They say many customers begin the cancellation process but drop out halfway.
Amazon’s Response
- Amazon firmly denies wrongdoing. The company insists that the terms of Prime—including fees and cancellation rights—were clearly disclosed.
- It also claims there have always been multiple, valid ways for members to cancel, despite the FTC’s allegations of overly complex procedures.
Legal and Regulatory Background
- The lawsuit is brought under the Restore Online Shoppers’ Confidence Act (ROSCA), a federal statute targeting online practices that mislead consumers, particularly around subscriptions and billing.
- The FTC’s scrutiny of Prime sign-up and cancellation practices is part of a broader crackdown—across administrations—on “dark patterns” and practices that might trick or trap consumers into paid commitments.
What’s New and When
- Though Amazon tested more transparent disclosures between 2017 and 2022, the FTC claims that senior executives repeatedly rejected clearer language to avoid reducing sign-ups.
- Amazon did not formally adopt improved disclosure practices until 2022 — but by then it was already under formal investigation by the FTC. The lawsuit was filed the following year.
What the Trial Will Look Like
- The trial is expected to stretch over about a month.
- Key witnesses will include both customers who claim they were misled and former or current Amazon employees who can speak to internal decision-making.
- A jury of nine will decide whether Amazon broke the law; if so, a judge will then determine the penalties and any damages.
Potential Consequences
- Penalties could be substantial. The FTC is seeking damages potentially in the hundreds of millions of dollars, plus fines that may reach up to US$53,000 per violation.
- Beyond financial repercussions, a ruling against Amazon would send a strong message to tech companies about clarity and fairness in subscription services. It could also influence how other platforms design their sign-up flows, disclosure statements, and cancellation mechanisms.
Bigger Picture
- This case illustrates the FTC’s growing willingness to go after large corporations over subscription practices. Other recent cases include actions against Uber One for allegedly misleading subscription offers, and fitness chain operators for difficult cancellation policies.
- It also reflects increasing bipartisan agreement in Washington that consumers need stronger protection from “subscription traps” — situations where users find themselves locked in without realizing or being able to easily exit.
What to Watch Going Forward
- How the jury interprets Amazon’s internal communications about sign-ups and cancellation — showing whether Amazon prioritized customer volume over transparency.
- Whether judges or regulators require companies to change how they present subscription offers online—including how prominently fees, auto-renewals, and cancellation steps must be displayed.
- The scale of any penalties, which could influence not just Amazon but also subscription practices throughout eCommerce and tech industries.
As this trial unfolds, it promises to highlight tensions between business practices aimed at customer retention and emerging standards for consumer protection in the digital age. For Prime members, and anyone subscribing to online services, it could also lead to more clarity, fewer surprises, and more control over how—or if—they stay subscribed.
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