On October 18, 2023, Amazon filed a motion to dismiss the Federal Trade Commission’s lawsuit alleging that the company deceived millions of consumers into nonconsensual Prime membership enrollment and thwarted members’ attempts to cancel their Prime subscriptions. In a heavily redacted complaint filed on June 21, 2023 in the Western District of Washington, the FTC charges Amazon with using “manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions,” in violation of the FTC Act and the Restore Online Shoppers’ Confidence Act (“ROSCA”). The FTC describes the Amazon platform as bombarding customers with options to sign up for Prime and obscuring options to shop without Prime, making non-Prime alternatives difficult for consumers to locate. In some cases, the FTC alleges, the button to complete a transaction did not clearly state the shopper was also agreeing to enroll in a recurring Prime subscription.
The FTC’s Enforcement Power: How AMG Reshapes the Landscape
In a unanimous opinion, the U.S. Supreme Court held that Section 13(b) of the FTC Act does not authorize the Federal Trade Commission to seek monetary relief in the form of restitution or disgorgement, despite the agency’s redoubled practice of seeking such relief under the Act since 2012. The Court’s
No Harm? No Matter. FTC Broadens Data Security Liability
No harm, no foul? Not according to the FTC.
On July 29, 2016, the Commission held that a showing of tangible injury was not necessary in order for company acts and practices to be considered unfair. The case, In the Matter of LabMD, Inc., arose after a data security company accessed and downloaded a file from a former medical testing company, LabMD. The file contained 1,718 pages of personal information belonging to approximately 9,300 consumers, including names, addresses, dates of birth, social security numbers and medical information. The FTC’s ruling overturned a prior decision by Chief Administrative Law Judge D. Michael Chappell, who had found that LabMD’s supposed failure to institute reasonable data security measures was not likely to cause substantial injury to consumers.