Amazon violated federal consumer protection law in how it enrolled customers into Prime, a U.S. judge has ruled. District Judge John Chun ruled that Amazon gathered billing information from Prime customers before fully disclosing the program’s terms, giving the Federal Trade Commission (FTC) an early advantage in its case.
The FTC alleges that tens of millions of consumers were enrolled without proper consent and that many encountered barriers when attempting to cancel. Judge Chun also held that two Amazon executives may be personally liable if the FTC proves its claims, rejecting Amazon’s argument that the Restore Online Shoppers’ Confidence Act does not apply to Prime signups.
Amazon has disputed the decision, stating that its practices were lawful. “We always put customers first,” an Amazon spokesperson said, adding that neither the company nor its executives acted improperly. The trial will now determine whether Amazon must pay restitution and modify its subscription practices. The outcome could have broader implications for subscription-based models in the technology sector, influencing how companies disclose terms and manage customer cancellations in the future.
