A U.S. judge ruled on Wednesday that Amazon (AMZN.O) violated consumer protection law by gathering Prime subscribers’ billing information before disclosing the service’s terms. This decision marks a partial victory for the U.S. Federal Trade Commission (FTC).
The ruling by U.S. District Judge John Chun, in a case accusing Amazon of using deceptive practices to generate Prime subscriptions, puts the company at a disadvantage during the trial. However, a company spokesperson stated that Amazon had done nothing wrong.
The FTC is set to argue that the online retailer signed up tens of millions of customers for Prime without their consent and hindered tens of millions of cancellation attempts through complex cancellation methods. The agency claims these actions violated the Restore Online Shoppers Confidence Act (ROSCA).
“Today’s decision affirms that Amazon defrauded American consumers by failing to disclose all terms of Prime before collecting consumer’s payment information,” said Chris Mufarrige, head of the FTC’s bureau of consumer protection. “The Trump-Vance FTC intends to make them whole.”
The judge also ruled that two Amazon executives are liable for any violations the FTC proves at trial, while simultaneously barring Amazon from arguing that ROSCA did not apply to Prime signups.
“The bottom line is that neither Amazon nor the individual defendants did anything wrong,” a company spokesperson said in a statement. The spokesperson, in an email to Reuters, added, “We remain confident that the facts will show these executives acted properly and we always put customers first.”
