Amazon has been found in violation of U.S. consumer protection law by collecting payment information from Prime customers before disclosing the full terms of the subscription, a federal judge ruled on Wednesday. The decision marks a partial victory for the Federal Trade Commission (FTC) as it pursues claims that the company used deceptive practices to boost enrollment in its membership program, according to Reuters.
U.S. District Judge John Chun’s ruling prevents Amazon from contesting whether the Restore Online Shoppers Confidence Act (ROSCA) applies to Prime subscriptions. The FTC alleges the online retail giant signed up tens of millions of people without their consent and deliberately made cancellation procedures difficult in order to keep them subscribed. The ruling also held two Amazon executives liable for potential violations if the FTC proves its case at trial.
“Today’s decision affirms that Amazon defrauded American consumers by failing to disclose all terms of Prime before collecting consumer’s payment information,” Chris Mufarrige, who leads the FTC’s bureau of consumer protection, said in a statement. “The Trump-Vance FTC intends to make them whole.”
Read more: Amazon Fine in Italy Cut After Court Review
Amazon, however, disputed the allegations. A company spokesperson told Reuters that the company had acted properly. “The bottom line is that neither Amazon nor the individual defendants did anything wrong,” the spokesperson said. The statement added: “We remain confident that the facts will show these executives acted properly and we always put customers first.”
The FTC’s case highlights ongoing scrutiny over how major online platforms design subscription systems. According to Reuters, the government is aiming to demonstrate that Amazon’s practices not only violated federal law but also undermined consumer choice.
Source: Reuters
Secure Complaint RMAI Certified Broker
