Seattle Judge Denies Amazon Motion to Dismiss FTC’s Prime Complaint

U.S. District Judge John Chun for Western Washington in Seattle denied the motion of Amazon and three of its executives to dismiss the FTC’s amended Amazon Prime complaint, said Chun’s signed order Tuesday (docket 2:23-cv-00932). The FTC’s Sept. 20 amended complaint alleges Amazon for years has tried to enroll consumers into its Prime program without their consent "while knowingly making it difficult" for them to cancel their Prime subscriptions (see 2309200069). Newly named in the amended complaint were Neil Lindsay, Russell Grandinetti and Jamil Ghani, Amazon executives with current or former Prime oversight. Amazon’s motion to dismiss argued that its Prime enrollment processes don’t violate the FTC Act or the Restore Online Shoppers’ Confidence Act (ROSCA), as the FTC alleged. Because this matter comes before the court on Rule 12(b)(6) motions to dismiss, the court must accept as true the allegations in the amended complaint and must view them in the light most favorable to the FTC, said the judge’s order. The FTC alleges that Amazon’s online cancellation process for Prime “required consumers to click six times and go through four screens, seeking to entice consumers not to cancel the subscription, or merely pause the subscription, before the consumer could finally cancel Prime,” it said. Viewing the amended complaint in the light most favorable to the FTC, the court can’t dismiss the claim that cancellation method wasn't a “simple mechanism,” as ROSCA requires, said the order. A "reasonable company in Amazon’s position" would be aware that state and federal laws, including ROSCA, "regulate negative option marketing and require that material terms be clearly and conspicuously disclosed and that they must obtain express informed consent before charging consumers," said the order. Viewing the amended complaint in the light most favorable to the FTC, the court concludes that the allegations "sufficiently indicate that Amazon had actual or constructive knowledge that its Prime sign-up and cancelation flows were misleading consumers," it said.