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Amazon reached a $2.5 billion settlement with the Federal Trade Commission (FTC) on Thursday over whether the e-commerce giant used “deceptive methods” to sign up consumers for Prime subscriptions, then made it “exceedingly difficult” to cancel. The agency argued Amazon enrolled millions of customers in Prime subscriptions without their consent, and knowingly made it difficult for consumers to get out of the agreement. That settlement, which comes just three days into the civil trial in federal court in Seattle, included a whopping $1 billion civil penalty, the highest in history, and a $1.5 billion fund to refund Prime users harmed by the deceptive enrollment practices. The e-commerce giant must also create an easier way for users to cancel, which includes modifying its interface, and “cease unlawful enrollment and cancellation practices.” “Today, we are putting billions of dollars back into Americans pockets, and making sure Amazon never does this again,” FTC Chairman Andrew N. Ferguson said in a statement. The FTC case charged Amazon and several company executives with knowingly misleading millions of consumers into enrolling in Prime, violating the FTC Act and the Restore Online Shoppers Confidence Act (ROSCA). Documents in the lead-up to trial were cited to show Amazon executives and employees “knowingly discussed these unlawful enrollment and cancellation issues”making comments such as, subscription driving is a bit of a shady world, and stating that leading consumers to unwanted subscriptions is an unspoken cancer. Amazon did not admit to or deny the FTC’s allegations about misleading customers in the settlement. The company told the Wall Street Journal in a statement: “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world.” Industry experts react Reactions to the settlement have been mixed. After defrauding tens of millions of people with an intentionally labyrinthine cancellation process, the FTC is allowing Amazon and its executives to walk away scot-free, said Nidhi Hegde, executive director of the American Economic Liberties Project, a non-profit that advocates for corporate accountability legislation. That double standard is why so many Americans have lost faith in this administrations willingness to hold corporate lawbreakers accountable. Others said the settlement may have made Prime easier to cancel, but the program will continue to remain in many American households. “The settlement with the FTC may streamline Primes cancellation process, but it wont dent the programs dominance,” Emarketer analyst Zak Stambor told Fast Company. “Prime brought in $44 billion in subscription revenue last year aloneso the payout represents just 5.6% of that total. With more than 200 million global members, including three-quarters of U.S. households, Prime is the backbone of Amazons business model.” Meanwhile, some consumer watchdog groups were pleased by the settlement, and called on the FTC to resurrect “click-to-cancel” rules to make it easier to cancel auto-renewing agreements such as streaming subscriptions and gym memberships. This is a great day for consumersnot just Amazon customers, but everyone who gets roped into any kind of subscription or agreement in questionable ways,” said Teresa Murray, consumer watchdog director at U.S. PIRG Education Fund. In the meantime, we hope this Amazon settlement sends a strong message to any company operating in ways that could conceivably confuse customers or thwart their efforts to not be customers any more.
Category:
E-Commerce
The Federal Aviation Administration on Thursday said it was extending an order limiting operations at Newark Liberty International Airport through October 24, 2026. The order, which limits the rate of arrivals and departures, follows comments from the New Jersey airport’s operator and airlines on extending flight limits to help address congestion at one of three main airports serving New York City. Newark is a major hub for United Airlines. Jasper Ward, Reuters
Category:
E-Commerce
Despite years of congressional hearings, lawsuits, academic research, whistleblowers and testimony from parents and teenagers about the dangers of Instagram, Meta’s wildly popular app has failed to protect children from harm, with woefully ineffective” safety measures, according to a new report from former employee and whistleblower Arturo Bejar and four nonprofit groups. Metas efforts at addressing teen safety and mental health on its platforms have long been met with criticism that the changes dont go far enough. Now, the report published Thursday, from Bejar, the Cybersecurity For Democracy at New York University and Northeastern University, the Molly Rose Foundation, Fairplay and ParentsSOS, claims Meta has chosen not to take real steps to address safety concerns, opting instead for splashy headlines about new tools for parents and Instagram Teen Accounts for underage users. Meta said the report misrepresents its efforts on teen safety. The report evaluated 47 of Meta’s 53 safety features for teens on Instagram, and found that the majority of them are either no longer available or ineffective. Others reduced harm, but came with some “notable limitations, while only eight tools worked as intended with no limitations. The report’s focus was on Instagram’s design, not content moderation. This distinction is critical because social media platforms and their defenders often conflate efforts to improve platform design with censorship, the report says. However, assessing safety tools and calling out Meta when these tools do not work as promised, has nothing to do with free speech. Holding Meta accountable for deceiving young people and parents about how safe Instagram really is, is not a free speech issue. Meta called the report misleading, dangerously speculative and said it undermines the important conversation about teen safety. This report repeatedly misrepresents our efforts to empower parents and protect teens, misstating how our safety tools work and how millions of parents and teens are using them today. Teen Accounts lead the industry because they provide automatic safety protections and straightforward parental controls, Meta said. “The reality is teens who were placed into these protections saw less sensitive content, experienced less unwanted contact, and spent less time on Instagram at night. Parents also have robust tools at their fingertips, from limiting usage to monitoring interactions. Well continue improving our tools, and we welcome constructive feedback but this report is not that. Meta has not disclosed what percentage of parents use its parental control tools. Such features can be useful for families in which parents are already involved in their childs online life and activities, but experts say thats not the reality for many people. New Mexico Attorney General Raśl Torrez who has filed a lawsuit against Meta claiming it fails to protect children from predators said it is unfortunate that Meta is doubling down on its efforts to persuade parents and children that Metas platforms are saferather than making sure that its platforms are actually safe. The authors created teen test accounts as well as malicious adult and teen accounts that would attempt to interact with these accounts in order to evaluate Instagram’s safeguards. For instance, while Meta has sought to limit adult strangers from contacting underage users on its app, adults can still communicate with minors through many features that are inherent in Instagrams design, the report says. In many cases, adult strangers were recommended to the minor account by Instagrams features such as reels and people to follow.” Most significantly, when a minor experiences unwanted sexual advances or inappropriate contact, Metas own product design inexplicably does not include any effective way for the teen to let the company know of the unwanted advance, the report says. Instagram also pushes its disappearing messages feature to teenagers with an animated reward as an incentive to use it. Disappearing messages can be dangerous for minors and are used for drug sales and grooming, and leave the minor account with no recourse, according to the report. Another safety feature, which is supposed to hide or filter out common offensive words and phrases in order to prevent harassment, was also found to be largely ineffective. Grossly offensive and misogynistic phrases were among the terms that we were freely able to send from one Teen Account to another, the report says. For example, a message that encouraged the recipient to kill themselves and contained a vulgar term for women was not filtered and had no warnings applied to it. Meta says the tool was never intended to filter all messages, only message requests. The company expanded its teen accounts on Thursday to users worldwide. As it sought to add safeguards for teens, Meta has also promised it wouldn’t show inappropriate content to teens, such as posts about self-harm, eating disorders or suicide. The report found that its teen avatars were nonetheless recommended age-inappropriate sexual content, including graphic sexual descriptions, the use of cartoons to describe demeaning sexual acts, and brief displays of nudity. We were also algorithmically recommended a range of violent and disturbing content, including Reels of people getting struck by road traffic, falling from heights to their death (with the last frame cut off so as not to see the impact), and people graphically breaking bones, the report says. In addition, Instagram also recommended a range of self-harm, self-injury, and body image content on teen accounts that the report says would be reasonably likely to result in adverse impacts for young people, including teenagers experiencing poor mental health, or self-harm and suicidal ideation and behaviors. The report also found that children under 13 and as young as six were not only on the platform but were incentivized by Instagrams algorithm to perform sexualized behavior such as suggestive dances. The authors made several recommendations for Meta to improve teen safety, including regular red-team testing of messaging and blocking controls, providing an easy, effective, and rewarding way for teens to report inappropriate conduct or contacts in direct messages and publishing data on teens’ experiences on the app. They also suggest that the recommendations made to a 13-year-old’s teen account should be reasonably PG-rated,” and Meta should ask kids about their experiences of sensitive content they have been recommended, ncluding frequency, intensity, and severity. Until we see meaningful action, Teen Accounts will remain yet another missed opportunity to protect children from harm, and Instagram will continue to be an unsafe experience for far too many of our teens, the report says. Barbara Ortutay, AP technology writer
Category:
E-Commerce
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