A van with the logo for Prime, a subscription service of U.S. online retailer Amazon, drives away from the company's logistics centre in Trapagaran, northern Spain, November 22, 2023. REUTERS/Vincent West/File Photo
WASHINGTON (Reuters) - Amazon violated consumer protection law by gathering Prime subscribers' billing information before disclosing the service's terms, a judge ruled on Wednesday, handing the U.S. Federal Trade Commission a partial win.
The ruling by U.S. District Judge John Chun in the case accusing Amazon of deceptive practices to generate Prime subscriptions puts the company at a disadvantage at trial, though a company spokesperson said it had done nothing wrong.
The FTC is poised to argue that the online retailer signed up tens of millions of customers for Prime without their consent, and thwarted tens of millions of cancellation bids through complex cancellation methods.
The agency says those 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 were liable for any violations the FTC proves at trial, while 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.
"We remain confident that the facts will show these executives acted properly and we always put customers first," the spokesperson added in the statement emailed to Reuters.
(Reporting by Kanishka Singh in Washington and Jody Godoy in New York; Editing by Clarence Fernandez)
