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Arguments are set to get underway Tuesday in a case brought by the Federal Trade Commission against Amazon, focusing on how the retailer convinced shoppers to sign up for Amazon Prime and the obstacles it allegedly created to exit that loyalty program. The FTC alleges Amazon tricked nearly 40 million customers into signing up for Prime, then made it challenging to cancel their subscriptionsa violation, the agency says, of consumer protection laws. The FTC is seeking refunds for consumers, civil penalties, and an order that would require Amazon to make it easy to cancel a Prime subscription. The case will be heard in federal court in Seattle, with opening arguments expected to begin Tuesday. Amazon, in a statement to Fast Company, denied all of the claims. “The bottom line is that neither Amazon nor the individual defendants did anything wrongwe remain confident that the facts will show these executives acted properly and we always put customers first,” a company spokesperson said. The lawsuit against Amazon was originally filed two years ago. And while its focus isn’t as sweeping as the looming antitrust trial, which is moving forward following the retailers recent failed attempt to have the case dismissed, it does zero in on a popular program used by millions of people. While Amazon does not regularly report Prime membership data, it’s subscriber numbers are estimated to be north of 200 million. Last year, the cost of those subscriptions brought in $4 million to the company. (Prime customers also tend to buy more than non-Prime ones.) A Prime subscription currently costs $14.99 per month, or $139 annually. Amazon was aware for years that it was taking consumers money without their consent, yet chose to do nothing about it, the FTC wrote in a recent court filing. A “labyrinthine” process The FTC alleges that Amazon created a labyrinthine cancellation process designed to deter customers from finishing the act of cancellation. The agency says this process was referred to internally as Iliad Flow, and claims that customers wishing to cancel their Prime memberships were required to navigate a four-page, six-click, fifteen-option cancellation process. Warnings on missing deals and discounts were also included to discourage customers, according to the agency. Following the FTCs filing of the suit, Amazon has changed its cancellation policies. A stand-alone cancellation page lets members see the options available to them on pausing or ending their membership. The FTC suit is continuing, however, with a focus on customers who signed up before those changes. The jury trial is expected to last for approximately a month. Should Amazon be found in violation of the law, the judge will decide what the retailer will pay in damages. That same judge, John Chun, last week ruled that Amazon violated consumer-protection laws through its practice of taking the billing information of Prime members before it disclosed the terms of the membership. Chun also said Amazon executives Neil Lindsay and Jamil Ghani would be individually liable if the FTC wins the trial, given their high level of involvement with the cancellation practices. Beyond Amazon, the FTC has pending cases against LA Fitness and Uber for similar subscription and cancellation practices. (Both have denied the charges.) Match Group settled a similar case earlier this year for $14 million. As for the antitrust case against Amazon by the FTC and several state attorneys general, that’s currently slated to go to trial in 2027.
Category:
E-Commerce
President Donald Trump has abruptly canceled this week’s planned meeting with congressional Democratic leaders, refusing to negotiate over their demands to shore up health care funds as part of a deal to prevent a potential looming federal government shutdown. In a lengthy Tuesday social media post, Trump rejected the sit-down the White House had agreed to the day before. It would have been the first time the Republican president met with the Democratic Party’s leaders, Sen. Chuck Schumer and Rep. Hakeem Jeffries, since his return to the White House. I have decided that no meeting with their Congressional Leaders could possibly be productive, Trump wrote in the post. The president complained the Democrats are threatening to shut down the Government of the United States” unless the Republicans agree to more funding on health care for various groups of people he has criticized. Trump did not close the door on a future sit-down with the Democratic leaders, but he warned of a long and brutal slog ahead unless Democrats dropped their demands to salvage health care funds. Earlier Tuesday, Schumer and Jeffries had issued a joint statement saying that after weeks of Republican stonewalling, the president had agreed to meet in the Oval Office. But after the Republican president canceled the meeting, the Democratic leaders accused him of throwing a tantrum and running away. Jeffries posted on X that Trump Always Chickens Out. Donald Trump just cancelled a high stakes meeting in the Oval Office with myself and Leader Schumer, Jeffries wrote on X. The extremists want to shut down the government because they are unwilling to address the Republican healthcare crisis that is devastating America. In a post on X directed at Trump, Schumer said Democrats will sit down and discuss health care when youre finished ranting. Schumer said Trump is running away from the negotiating table before he even gets there and would rather throw a tantrum than do his job. With Congress at a stalemate, the government is headed toward a federal shutdown next week, Oct. 1, if the House and the Senate are unable to approve the legislation needed to fund offices and services into the new fiscal year. Lawmakers left town amid the logjam, and they are not due back until Sept. 29. Trump has been unafraid of shutting down the government and, during his first term, was president over the nation’s longest federal closure, during the 2018-19 holiday season, when he was pushing Congress to provide funds for his long-promised U.S.-Mexico border wall. The president insisted over the weekend that essential services, including for veterans, would remain open. Republicans, who have the majority in both the House and the Senate, have been trying to avoid a shutdown. House Speaker Mike Johnson led the passage late last week of a temporary funding measure, which would have kept government offices running into November while talks get underway. That’s the typical way to buy time during funding fights, but the measure failed in the Senate. Democrats refused to support the stopgap bill because it did not include their priorities of health care funds. A Democratic proposal, with the health care money restored, was defeated by Senate Republicans. Schumer and Jeffries have demanded a meeting with Trump to work out a compromise, but the Republican president has been reluctant to enter talks and instructed GOP leaders on Capitol Hill not to negotiate with the Democrats. Thursday’s scheduled meeting would have potentially set up a showdown at the White House, reminiscent of the 2018 funding fight when Trump led an explosive public session with Schumer and Rep. Nancy Pelosi. Democrats are working to protect health care programs. The Democratic proposal would extend enhanced health insurance subsidies set to expire at the end of the year, plus reverse Medicaid cuts that were included in Republicans big tax breaks and spending cuts bill enacted earlier this year. Republicans have said the Democrats demands to reverse the Medicaid changes are a nonstarter, but they have also said there is time to address the health insurance subsidy issue in the months ahead. Lisa Mascaro, AP congressional correspondent
Category:
E-Commerce
Shares of Tylenol maker Kenvue bounced back sharply at the opening bell Tuesday, a day after President Donald Trump promoted unproven and in some cases discredited ties between Tylenol, vaccines, and autism. Dont take Tylenol, Trump instructed pregnant women around a dozen times during the White House news conference Monday, also urging mothers not to give their infants the drug, known by the generic name acetaminophen in the U.S. or paracetamol in most other countries. Shares of the New Jersey consumer brands company tumbled 7.5% Monday. At the opening of trading, shares bounced back by more than 6%. The announcement, which appeared to rely on existing studies rather than significant new research, arrives as Health and Human Services Secretary Robert F. Kennedy Jr., a vaccine skeptic, advances the Make America Healthy Again movement that has focused on what it sees as potential causes of autism. Kenvue disputed any link between the drug and autism this week and warned that if pregnant mothers dont use Tylenol when in need, they could face a dangerous choice between suffering fevers or using riskier alternatives. Kenvue was spun off from Johnson & Johnson’s pharmaceutical and medical device divisions in 2023 because it was thought that the companies could function more efficiently if they were independent from each other. Aside from Tylenol, the consumer health company makes Band-Aids, Listerine and other household brand names. Citi Investment Research analyst Filippo Falorni wrote that he sees a limited risk of new lawsuits after Trump’s announcement, but thinks there could be risk to Tylenol consumption given the negative headlines. Falorni anticipates a positive reaction for Kenvues stock at the opening bell on Tuesday, given the lack of new scientific evidence. The company has fought hundreds of lawsuits related to the product and its alleged ties to autism, but most have been dismissed. Tylenol made headlines in the 1980s when seven people in the Chicago area were killed after taking the over-the-counter painkiller laced with cyanide. The incident triggered a nationwide panic and led to an overhaul in the safety of over-the-counter medication packaging. No one was ever charged in the deaths. Michelle Chapman, AP business writer
Category:
E-Commerce
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