US Judge Denies Amazon's Motion to Dismiss FTC Lawsuit Over Prime Membership Practices

Key Points

• A U.S. judge in Seattle denied Amazon's (AMZN) request to dismiss the FTC lawsuit accusing the company of enrolling consumers into Prime without consent.
• The FTC alleges that Amazon used deceptive practices and 'dark patterns' to make it difficult for consumers to cancel their Prime memberships.
• The lawsuit is part of the Biden administration's broader regulatory actions against big tech, with a trial set for February 2025.

In this news

In a significant legal development, a U.S. judge in Seattle has denied Amazon.Com Inc's (AMZN) request to dismiss a Federal Trade Commission (FTC) lawsuit. The lawsuit accuses the e-commerce giant of enrolling consumers into its Prime membership program without their consent. This decision marks a pivotal moment in the ongoing legal battle between Amazon and the FTC, setting the stage for a trial scheduled for February 2025.

The FTC's lawsuit alleges that Amazon (AMZN) employed deceptive practices that made it difficult for consumers to cancel their Prime memberships, often resulting in unwanted charges. According to the FTC, Amazon used so-called 'dark patterns'—manipulative website designs—to trick consumers into auto-renewing their Prime subscriptions. Amazon's defense argued that the company had disclosed key terms to Prime customers and accused the FTC of using vague concepts to penalize the company.

This legal action is part of a broader regulatory push by the Biden administration against major tech companies. The outcome of this case could have far-reaching implications for Amazon's business practices and consumer protection regulations. As the trial date approaches, both Amazon and the FTC are expected to present detailed arguments, with potential civil penalties and injunctions on the line.