The Federal Trade Commission sued Amazon in U.S. District Court in Seattle two years ago and has alleged more than a decade of legal violations.
A federal trial beginning in Amazon’s hometown this week is set to examine whether the online retailing giant tricked customers into signing up for its Prime service and made it difficult to cancel after they did so.
The Federal Trade Commission sued Amazon in U.S. District Court in Seattle two years ago and has alleged more than a decade of legal violations, including of the Restore Online Shoppers’ Confidence Act, a 2010 law designed to help ensure that people know what they’re being charged for online.
Jury selection began Monday, with opening statements to follow.
Prime provides subscribers with perks that include faster shipping, video streaming and discounts at Whole Foods for a fee of $139 annually, or $14.99 a month.
It’s a key — and growing — part of Amazon’s business, with more than 200 million members. In its latest quarterly report, the company in July reported more than $12 billion in net revenue for subscription services, which is a 12% increase from the same period last year. That figure includes annual and monthly fees associated with Prime memberships, as well as other subscription services such as its music and e-books platforms.
The company said it does clearly explain Prime’s terms before charging customers, and that it offers simple ways to cancel membership, including by phone, online and by online chat.
“Occasional customer frustrations and mistakes are inevitable — especially for a program as popular as Amazon Prime,” Amazon said in a trial brief filed last week. “Evidence that a small percentage of customers misunderstood Prime enrollment or cancellation does not prove that Amazon violated the law.
