A U.S. District court judge ruled that Amazon (NASDAQ:AMZN) violated a law that protects consumers by retaining Prime subscribers’ billing information before disclosing all the terms of the membership, handing a victory to the U.S. Federal Trade Commission in its campaign to address the company’s deceptive practices.
The judge’s decision also found that two Amazon (NASDAQ:AMZN) executives are liable for any violations that the FTC can prove at this month’s trial, while also preventing the company from arguing that the Restore Online Shoppers Confidence Act does not apply to Prime memberships.
“Today’s decision affirms that Amazon defrauded American consumers by failing to disclose all terms of Prime before collecting consumer’s payment information,” the head of the FTC’s Bureau of Consumer Protection said in a statement to Reuters.
The FTC is attempting to prove that Amazon (NASDAQ:AMZN) signed up tens of millions of customers for Prime membership without their consent, and “sabotaging” their efforts to cancel their subscriptions through “complex” cancellation methods. The case is currently scheduled to go to trial next week (Sept 22).
The agency is also accusing the company of withholding documents pertinent to their case, including emails instructing employees to mislabel documents related to Prime memberships, and that involuntary Prime enrollments were so prevalent that the company created a “clearer web” for customers at risk of making repeated mistaken sign-ups.