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'Ominous Buzzwords'

4 Groups Propose Amicus Briefs in Support of Amazon in FTC's ROSCA Case

The FTC has failed to state a valid claim that Amazon uses unfair competitive methods for enabling subscriptions and cancellations, said the Computer & Communications Industry Association, NetChoice and the Chamber of Progress in their motion for leave Wednesday (docket 2:23-cv-00932) in U.S. District Court for Western Washington in Seattle to file an amicus brief in support of Amazon’s motion to dismiss. The U.S. Chamber of Commerce, the Interactive Advertising Bureau (IAB) and the Association of Corporate Counsel (ACC) also sought leave Wednesday to file amicus briefs in support of Amazon’s motion.

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The FTC’s suit alleges that Amazon has for years tried to enroll consumers into its Prime program without their consent “while knowingly making it difficult” for them to cancel their Prime subscriptions. The FTC added three Amazon executive co-defendants to the complaint in September (see 2309200069).

The agency amended the complaint to include emails and messages purporting to show that the executives were “fully aware of the issues” involving consumers being enrolled in Prime without their consent and that they faced “significant hurdles when trying to cancel.” The FTC alleges Amazon violated the Restore Online Shoppers’ Confidence Act's (ROSCA) prohibitions against unfair subscription enrollment practices. Amazon's Oct. 18 motion to dismiss (see 2310200061) said the FTC “seeks to establish an entirely new theory of legal liability based on misleading and subjective characterizations of unremarkable marketing techniques.”

"The cart is decidedly before the horse" in the FTC's lawsuit against Amazon, said CCIA's proposed amicus brief. A potential "liability clock" -- the possible accrual of civil penalties and other monetary relief -- "has been started without the necessary legal predicate having been established," it said.

The FTC's lawsuit seeks to hold Amazon liable for conduct that doesn't run afoul of "any applicable law,” said a CCIA news release Wednesday. The suit, which “seems to be based on Amazon’s updating of its policies to further benefit consumers in response to requests from FTC staff,” is “devoid of applicable law” and could “erode confidence in the nation’s executive agencies” if it were allowed to proceed, CCIA said. Agencies shouldn't be permitted "to pursue claims based on how they wish the law to be rather than on the law actually in effect," said CCIA Chief of Staff Stephanie Joyce. Nor should a company’s effort to improve the customer experience "be deemed grounds for liability,” she said.

The FTC’s “novel theories of prohibited practices, if accepted, would create enormous market uncertainty,” said the proposed Chamber of Commerce amicus brief. No federal statute or regulation prohibits “so-called ‘dark patterns,’ as evidenced by FTC regulatory history,” it said. The FTC defines dark patterns as “manipulative design elements that trick users,” which the Chamber said is “far too indeterminate.” If the court adopted the FTC’s proposed ban on dark patterns, “businesses and individuals would have no practical means to conform their conduct to the law,” it said: “They instead would be left with wholly subjective judgments” from the FTC.

Section 4 of ROSCA says it's unlawful to charge consumers for goods or services sold online through a negative option feature unless a party provides text that “clearly and conspicuously discloses all material terms,” said the Chamber. It must also obtain a consumer’s express informed consent and provide simple mechanisms to stop recurring charges, it said.

ROSCA doesn’t define those terms, said the Chamber, “nor does it prohibit the use of negative option features as long as the above-listed disclosure, consent, and cancellation conditions are met.” Businesses, “consistent with ROSCA’s express policy goals,” have lawfully used “a wide range of negative option features” to compete and develop the internet as “an important channel of commerce in the United States,” it said.

The FTC recognized that ROSCA provides no steps marketers should follow to comply with its provisions and recently attempted to define key terms related to disclosure, consent and cancellation in proposed rulemaking, said the chamber. The proposed rule, said the FTC, would provide “clearer guardrails” to avoid “the gray areas in current statutes and regulations.”

The IAB asserts that the FTC’s “dark patterns” reference is "a series of normal and lawful business practices cobbled together and grouped under ominous buzzwords,” said IAB's proposed amicus brief. The agency’s theory around dark patterns as presented in the complaint presents a “non-legitimate interest in regulating truthful speech,” it said.

The FTC alleges that Amazon has created a “roach motel” that forces consumers who have already expressed an intent to cancel a subscription “to view marketing and reconsider options other than cancellation,” said IAB. But efforts to make sure that someone wants to unsubscribe before unsubscribing them is a “common” practice, even on the FTC website, it said.

Someone wanting to unsubscribe from FTC news alerts will encounter “the FTC’s own unsubscription ‘roach motel’ -- a much more cumbersome process than what is described in the FTC’s complaint against Amazon,” IAB said. “The FTC is accusing Amazon and even individuals of violating the FTC Act for creating an unsubscription process that is less cumbersome than the FTC’s process,” it said.

That creates confusion for media companies, IAB said: “How are IAB’s members and their employees supposed to know what is permissible when following the FTC’s example would probably be deemed by the FTC as using dark patterns to deter consumers from unsubscribing from services they previously chose?”

The FTC’s amended complaint “wrongly attempts to impose penalties" based on Amazon's "mere act of conferring with counsel,” said the AAC's proposed amicus brief. The FTC's complaint alleges that Amazon's conferring with counsel shows its knowledge of illegal conduct and is grounds for civil penalties, it said. That assertion threatens Amazon's "constitutional right to consult counsel and undermines the important role of attorney-client communication in the U.S. legal system,” it said.