FTC and 17 states filed a lawsuit against Amazon for purported monopolistic behavior. They alleged that Amazon employed “punitive and coercive tactics” to illegally maintain monopolies.
The FTC noted that several Amazon executives were cognizant of the challenges associated with unsubscribing from Prime and engaged in discussions about “unlawful enrollment and cancellation issues,” which led to the lawsuit. Amazon reached a settlement, and FTC Chairman Andrew Ferguson indicated that billions of dollars will be returned “to Americans’ wallets,” including a $1 billion civil penalty and $1.5 billion in consumer redress. Amazon is in the process of refunding the $1.5 billion to approximately 35 million affected customers. Amazon is required to cease its illegal practices and implement significant modifications to its Prime enrollment and cancellation procedures, which must include a clear and visible option for users to refuse membership. Moreover, this option cannot simply state “No, I don’t want Free Shipping,” as a catch-all, seemingly mocking the user’s intent to cancel.
