Amazon Counters FTC Lawsuit Allegations on Deceptive Practices

Amazon is asking a Seattle judge to dismiss a lawsuit from the Federal Trade Commission (FTC), saying the case “fails in its entirety.” 

The eCommerce giant has vehemently denied allegations made by the FTC regarding deceptive practices related to its Amazon Prime subscription service, Reuters reported Thursday (Oct. 19).

Attorneys representing Amazon have urged U.S. District Judge John Chun to dismiss the FTC’s claims, arguing that the company has not deceived its Prime subscribers, asserting that it has consistently and prominently disclosed key terms, such as pricing and automatic renewal, to its customers, Reuters said.

The company also criticized the FTC for employing “undefined concepts” such as “manipulative” website designs. 

“In a case supposedly about clarity, the FTC’s purported standards are unconstitutionally opaque,” Amazon said.

In response to the FTC’s allegations, Amazon said that its sign-up and cancellation processes for the Prime service “are clear and simple by design” and “have always met a standard for customers well above legal requirements.”

Amazon also argued that it modified its cancellation process in April, prior to the FTC’s lawsuit, in response to the agency’s pressure, per the report. The company asserts that its cancellation process requires only five clicks on desktop and six on mobile.

The FTC’s lawsuit against Amazon is part of the Biden administration’s broader regulatory and enforcement efforts targeting large technology companies.

This case is not the only legal battle Amazon is facing. In a separate antitrust case, the FTC has accused Amazon of engaging in business practices that enable it to “illegally [maintain] its monopoly power.“

The antitrust lawsuit, filed Sept. 26 by the FTC and 17 states, alleges that Amazon uses unfair, anti-competitive strategies to restrict merchants from offering lower prices than those available on Amazon’s platform.

“The complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging,” the commission said in a news release at the time.

Amazon also pushed back against this lawsuit. 

“The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store,” an Amazon spokesperson told PYMNTS in an emailed statement. 

“The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court,” the spokesperson added. 

This case is also pending in Chun’s Seattle court.