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Amazon faces trial this week over whether it duped people into enrolling in Prime membership

By
Mary Cunningham
Reporter, MoneyWatch
Mary Cunningham is a reporter for CBS MoneyWatch. She previously worked at "60 Minutes," CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.
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Mary Cunningham

/ CBS News

Amazon faces a court hearing in Seattle this week to face allegations by federal regulators that the e-commerce giant duped customers into signing up for its Prime membership while also making it difficult for them to cancel their subscriptions.

The case,  by the Federal Trade Commission in 2023, centers on claims that Amazon engaged in what the agency said amounted to a "years-long effort" to trick millions of customers into automatically renewing their Prime subscriptions, specifically by using user-interface designs that were "manipulative, coercive or deceptive."

When it legal action against Amazon two years ago, the FTC said consumers who used Amazon to make purchases were presented with numerous options to subscribe to Prime, but that it was less clear how to buy an item without signing up for a membership. In some cases, the button for Amazon users to complete their purchase did not clearly indicate that they were also agreeing to enroll in Prime, according to regulators. 

The government's  also alleges that Amazon obfuscated the process to cancel a Prime subscription by forcing customers to jump through several hoops to end their membership. 

An FTC spokesperson declined to comment on the case. 

Amazon denies that its practices misled consumers. An Amazon spokesperson said in an email to CBS MoneyWatch on Monday that "neither Amazon nor the individual defendants did anything wrong." 

"We remain confident that the facts will show these executives acted properly and we always put customers first," the spokesperson added.

Jury selection in the trial is scheduled to begin Monday, followed by opening arguments and possible witness testimony on Tuesday. The trial, which is being  at the U.S. District Court for the Western District of Washington, is expected to last up to four weeks. The outcome will be decided by a the jury.

Prime members, who pay $14.99 monthly or $139 a year, get free shipping on certain items, faster delivery times and access to Prime Video, Amazon's streaming service, among other benefits.

In a separate suit, the FTC has also  Amazon of engaging in illegal behavior that allows it to inflate prices and suppress competition from rivals in violation of antitrust laws. Amazon denies that its practices reduce competition and hurt consumers. 

Edited by Alain Sherter

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