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Amazon faces FTC in trial over claims it tricked millions into Prime subscriptions

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The U.S. Federal Trade Commission (FTC) opened its case against Amazon on Tuesday, accusing the company of deliberately making it difficult for customers to avoid or cancel Prime subscriptions, prioritizing revenue growth over consumer choice.

FTC’s case:

FTC attorney Jonathan Cohen told jurors that Amazon knowingly enrolled millions of people in Prime without clear consent, using deceptive sign-up practices and “dark patterns” in its cancellation system. “More members, more money,” Cohen said, arguing Amazon refused to simplify processes because it feared sign-ups would fall.

The agency says Amazon’s practices violated the Restore Online Shoppers’ Confidence Act (ROSCA), pointing to the so-called “Iliad flow” — a cancellation process requiring up to seven clicks to end a membership, despite misleading prompts suggesting the process was already complete. An FTC expert estimated 40 million customers were signed up without consent.

Prime subscriptions cost $14.99 per month, covering free expedited shipping and access to streaming and other perks. For some households, Cohen noted, that monthly charge meant “grocery money, gas, or the last bit to make rent.”

Amazon’s defense:

Amazon attorney Moez Kaba rejected the FTC’s claims, insisting the company clearly disclosed terms and made canceling straightforward. He accused regulators of cherry-picking evidence and misinterpreting internal documents. Kaba argued ROSCA’s requirements remain vague and compliance “shouldn’t feel like Goldilocks” guessing the right level of disclosure.

Broader crackdown:

The trial is part of a bipartisan push against “subscription traps” and hidden fees. The FTC also sued Uber and LA Fitness this year over similar cancellation hurdles. The case began during Trump’s presidency and advanced under Biden, showing rare regulatory continuity across administrations.

Stakes:

  • Damages: Potentially hundreds of millions of dollars plus fines of up to $53,000 per violation.

  • Reputation: A conviction could tarnish Amazon’s customer-first image.

  • Executives: Three senior executives, including Jamil Ghani, face personal liability after a judge ruled they could be held accountable for violations.

The trial is expected to last about a month, with testimony from customers and current and former Amazon staff. The outcome could set a precedent for how aggressively regulators can police dark patterns and subscription practices across the digital economy.

CFPB ends Apple and U.S. Bank settlements early under Trump administration shift

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The Consumer Financial Protection Bureau (CFPB) has ended oversight agreements with Apple and U.S. Bank years ahead of schedule, according to recent court filings. The move is part of President Donald Trump’s broader effort to reduce CFPB enforcement and roll back settlements imposed during the Biden administration.

Apple’s settlement stemmed from a 2024 CFPB action that found the company and Goldman Sachs violated consumer protection laws by mishandling disputes on the Apple Credit Card and misleading customers about interest-free transactions. The original agreement required five years of enhanced compliance, but has now been cut short. Apple paid a $25 million civil penalty, fulfilling its financial obligation.

U.S. Bank, meanwhile, faced a 2023 settlement over allegations it illegally blocked unemployed consumers from accessing pandemic-era benefits. The deal also required five years of compliance monitoring. The bank has since paid a $15 million penalty, made restitution payments, and pledged corrective measures, leading regulators to end oversight.

The filings also reveal the CFPB under Trump has dropped oversight for other firms, including Toyota and Bank of America, while halting nearly all enforcement actions still pending when Trump took office.

Critics say the changes mark a significant retreat from the agency’s consumer protection role, while supporters argue that excessive monitoring placed unnecessary burdens on businesses.

Judge rules Amazon violated shopper protection law in Prime case

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Amazon (AMZN.O) violated U.S. consumer protection law by collecting Prime subscribers’ billing details before disclosing the service’s full terms, a federal judge ruled on Wednesday. The decision marks a partial victory for the Federal Trade Commission (FTC) as it prepares for trial against the retail giant.

U.S. District Judge John Chun said Amazon’s practices breached the Restore Online Shoppers Confidence Act (ROSCA), bolstering the FTC’s argument that the company used deceptive tactics to drive Prime signups. The agency alleges Amazon enrolled tens of millions of people in Prime without consent and made cancellation excessively difficult, frustrating millions of attempts to quit.

“Today’s decision affirms that Amazon defrauded American consumers by failing to disclose all terms of Prime before collecting consumer’s payment information,” said Chris Mufarrige, head of the FTC’s consumer protection bureau. “The Trump-Vance FTC intends to make them whole.”

The ruling also holds two Amazon executives potentially liable for violations if proven at trial, while preventing Amazon from arguing that ROSCA does not apply to Prime subscriptions.

Amazon rejected the allegations, saying it has always acted properly. “The bottom line is that neither Amazon nor the individual defendants did anything wrong,” a spokesperson said. “We remain confident that the facts will show these executives acted properly and we always put customers first.”