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FTC vs. Amazon: Attorney-Client Privilege at Risk, Says Corporate Lawyer Group

By  |  October 27, 2023

The Association of Corporate Counsel has strongly criticized the Federal Trade Commission’s actions in its lawsuit against Amazon, accusing the agency of trampling on executives’ First Amendment rights and attempting to compel them to reveal confidential discussions with their in-house counsel, reported Reuters. In a proposed amicus curiae brief submitted to the court overseeing the case, the ACC asserts that the FTC’s approach forces the defendant into an untenable position, where they must relinquish the protections of attorney-client privilege to counter the plaintiff’s claims.

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    The FTC initiated legal action against Amazon in June, alleging that the tech giant unlawfully entrapped consumers into its Prime program through the use of deceptive tactics referred to as “dark patterns” and made it arduous for them to cancel their subscriptions. According to Reuters in September, the agency amended its complaint, unveiling the identities of the executives behind the alleged actions and disclosing previously redacted information, including details regarding the involvement of in-house counsel.

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    Related: FTC Prepares Possible Antitrust Suit Against Amazon

    Within this amended complaint, the FTC accused Amazon’s in-house legal team of non-cooperation in good faith and of leveraging attorney-client privilege safeguards to shield internal communications from scrutiny. Notably, the agency contended that the company’s legal counsel were being included in discussions related to Prime enrollment and the so-called “Iliad Flow,” a colloquial term for the process consumers follow to terminate their subscriptions, even when these communications did not pertain to legal matters.

    According to Reuters, by characterizing these discussions as privileged when they were not, the FTC argued in its September filing that Amazon obstructed its investigation, causing delays in accessing crucial evidence. The FTC also claimed that this aggressive use of attorney-client privilege suggests that executives possessed knowledge of illicit activities, thereby providing grounds for seeking civil penalties against them, including under the Restore Online Shoppers’ Confidence Act, one of the laws the FTC alleges Amazon violated.

    Source: Reuters