US judge rejects Amazon bid to get FTC lawsuit tossed over Prime program

By Thomson Reuters May 28, 2024 | 7:03 PM

By David Shepardson

WASHINGTON (Reuters) -A U.S. judge in Seattle on Tuesday rejected Amazon.com’s request to dismiss a Federal Trade Commission lawsuit that accuses the company of enrolling millions of consumers into its paid Amazon Prime service without their consent.

Attorneys for Amazon had urged U.S. District Judge John Chun to dismiss the FTC’s claims. Amazon did not immediately respond to a request for comment.

The FTC lawsuit filed in June 2023 accusing the retailer of deceptive practices. It argued Amazon made it hard to cancel and knew that a percentage of consumers accidentally signed up for Prime and that some consumers were charged for multiple months before they canceled their memberships.

Amazon urged Chun to dismiss the FTC lawsuit, arguing the company “prominently and repeatedly” disclosed key terms – including price and automatic renewal – to Prime customers. Amazon also accused the FTC of seeking to punish the company through “undefined concepts” such as “manipulative” website designs.

Amazon used “manipulative, coercive or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions,” the FTC said, which has sought civil penalties and a permanent injunction to prevent future violations.

The lawsuit is part of the Biden administration’s ongoing regulatory and enforcement squeeze on big technology companies.

In a separate lawsuit, the FTC in September accused Amazon of violating U.S. antitrust law in business practices that restrict merchants from offering lower prices than Amazon’s. That case is also pending in Chun’s Seattle court and set for trial in October 2026.

The FTC’s Prime lawsuit said Amazon “under substantial pressure” from the FTC changed its cancellation process in April, before the agency filed its lawsuit. The complaint said “Amazon still requires five clicks on desktop and six on mobile for consumers to cancel from Amazon.com.”

A 10-day non-jury trial in the case is scheduled for February 2025.

(Reporting by David Shepardson; Editing by Himani Sarkar and Christopher Cushing)