The US’ Federal Trade Commission (FTC) lawsuit against Amazon regarding its Prime membership programme continues, Reuters has reported.
A Seattle judge recently rejected Amazon’s attempt to dismiss the case.
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The FTC accuses Amazon of deceptive practices in enrolling customers into Prime memberships and then making it difficult to cancel.
The FTC first filed the lawsuit in June 2023, alleging that Amazon had misled consumers and made it cumbersome to cancel Prime subscriptions.
According to the FTC, some customers signed up for Prime unintentionally and were charged for multiple months before cancelling.
Reuters noted Amazon argued against the FTC’s claims, stating that it clearly disclosed key points such as pricing and automatic renewal to Prime users.
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By GlobalDataIt further accused the FTC of using undefined terms such as incorporating a ‘manipulative’ website design to unfairly target it.
The FTC, however, countered that Amazon employed deceptive user interface designs, known as ‘dark patterns,’ to trick users into signing up for automatically renewing subscriptions.
The FTC seeks both civil penalties and a permanent injunction to prevent such practices in the future.
According to Reuters, this lawsuit is part of the Biden administration’s broader effort to regulate big tech companies.
The FTC also has a separate antitrust lawsuit against Amazon, accusing it of restricting merchants from offering lower prices. That case is set for trial in October 2026.
Interestingly, the FTC claims that Amazon revamped its cancellation process in April 2023, likely due to pressure from the agency.
However, the FTC argues that cancelling Prime still requires an excessive number of clicks (five on desktop and six on mobile).
The upcoming non-jury trial for the Prime membership lawsuit is scheduled for February 2025.
This case has significant implications for e-commerce businesses and their subscription practices, with potential consequences for how companies acquire and retain customers.
