The Federal Trade Commission’s (FTC) lawsuit against Amazon over its Prime subscription practices is set for trial in Seattle next week. The case, filed in 2023, alleges that Amazon “tricked” consumers into signing up for Prime and made cancelling their Prime subscription too complicated. But a closer look at the FTC’s arguments reveals a troubling reality: the agency is using vague, subjective standards to create a picture of business malpractice where it doesn’t exist. Concerningly, the FTC is also attacking Amazon for their attempts to learn more about how their consumers use their platform and improve upon it.
At the center of the case is the Restore Online Shoppers Confidence Act (ROSCA), a law that requires businesses to obtain clear consent and provide a “simple” cancellation method. But “simple” is not defined anywhere in the statute, nor has the FTC provided concrete rules to guide compliance. Instead, the agency is prosecuting based on their own subjective interpretations as if Amazon should be able to predict what the agency spontaneously decides is and isn’t acceptable.
Compare this to how we enforce speeding laws. Signs clearly post the speed limit. Go higher than 70mph, and you’re speeding. It’s an objective standard. What the FTC is doing here is effectively penalizing Amazon for what it feels like is against the law, without any sort of objective standard to measure against, like a speed limit sign without a number. Businesses and consumers alike deserve clear rules of the road, not open-ended standards that can be bent after the fact.
Contrary to the FTC’s subjective accusation, cancelling Amazon Prime has always been a relatively easy process which Amazon has worked to even further simplify. Reporting shows it takes only 6 clicks to unsubscribe from Amazon Prime. Amazon’s evidence shows that the cancellation process worked for 96% of users within 90 seconds. Both show Amazon should easily meet the “reasonable person” standard the judge of this case has already recognized. By any objective measure, Amazon provided a straightforward, pro-consumer process.
The FTC’s accusations partially rely on internal Amazon documents, particularly the work of its “Tiger team.” This group was dedicated to finding pain points and solving problems for Prime users. Instead of recognizing this as a pro-consumer effort by the company to improve customer experience when using Amazon’s services, the FTC is twisting these efforts into supposed evidence of wrongdoing. Punishing a company for having an internal team devoted to consumer advocacy sends the wrong signal: don’t listen too closely to your customers, because regulators might use it against you.
The FTC has preferred to use buzzwords over statutory clarity. This case is largely a relic from the extreme Biden/Khan-era FTC. Former FTC Chair Lina Khan’s vendetta against Amazon was no secret, so it’s no surprise this case reeks of finding a crime to fit the punishment. If the FTC’s approach prevails, it won’t just hurt Amazon. It will set a dangerous precedent that will open the door for the government to micromanage markets and firms, sewing endless uncertainty for every American business that wants to invest in better user experiences. Ironically, it will ultimately harm consumers by discouraging companies from doing exactly what Amazon did: test, refine, and improve their services.
The FTC’s case against Amazon should concern all who value clear rules, consumer choice, and pro-innovation business practices. Regulators should write rules that are precise and predictable, not prosecute companies based on subjective standards and good-faith efforts to serve their customers. We should live in a world of standards, not prosecutable suggestions.