Judge rules Amazon violated shopper protection law in Prime case
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.”
