Amazon Faces FTC Lawsuit Over Prime Subscription Practices

Amazon has been found to have violated U.S. consumer protection law by collecting Prime subscribers’ billing information before fully disclosing the service’s terms, a federal judge ruled Wednesday. The decision gives the Federal Trade Commission (FTC) a partial victory in its ongoing case against the e-commerce giant.

U.S. District Judge John Chun’s ruling strengthens the FTC’s position as it prepares to argue that Amazon enrolled tens of millions of customers into Prime without proper consent and deliberately made cancellation difficult through complex processes. These practices, according to the FTC, breached the Restore Online Shoppers Confidence Act (ROSCA).

Chris Mufarrige, head of the FTC’s Bureau of Consumer Protection, said the decision affirms that “Amazon defrauded American consumers by failing to disclose all terms of Prime before collecting payment information.” He added that the agency intends to ensure affected consumers are compensated.

The court also ruled that two Amazon executives could be held liable for violations if the FTC proves its claims at trial. Furthermore, the judge barred Amazon from arguing that ROSCA does not apply to Prime sign-ups.

Amazon, which has denied the accusations, did not immediately provide a response to the ruling. The company has consistently maintained that its subscription and cancellation practices are clear and customer-friendly.

This case marks a significant moment in the FTC’s broader push to hold major corporations accountable for deceptive online practices. If the agency succeeds, it could reshape how digital subscription services operate and how companies disclose terms to consumers.

With millions of Prime members across the United States, the outcome of this lawsuit could have far-reaching implications for subscription-based businesses and consumer rights in the digital economy.