Amazon Reaches $2.5 Billion Settlement With FTC Over 'Deceptive' Prime Program (cnbc.com) 22
Amazon will pay $2.5 billion to settle Federal Trade Commission allegations that it duped users into paying for Prime memberships, the regulatory agency announced Thursday. CNBC: The surprise settlement comes as Amazon and the FTC were just three days into the trial in a Seattle federal court. Opening arguments took place on Tuesday. The lawsuit, filed by the FTC in June 2023 under the Biden administration, claimed that Amazon deceived tens of millions of customers into signing up for its Prime subscription program and sabotaged their attempts to cancel it.
Three senior Amazon executives were at risk of being held individually liable if the jury sided with the FTC. Amazon will pay a $1 billion civil penalty to the FTC and will refund $1.5 billion to an estimated 35 million customers who were impacted by "unwanted Prime enrollment or deferred cancellation," the agency said.
Three senior Amazon executives were at risk of being held individually liable if the jury sided with the FTC. Amazon will pay a $1 billion civil penalty to the FTC and will refund $1.5 billion to an estimated 35 million customers who were impacted by "unwanted Prime enrollment or deferred cancellation," the agency said.
Are you having trouble with your shopping? (Score:1)
And if so, how much of the blame belongs to Amazon for disrupting the retail market? Or is it just too unreasonable for any salespeople to know anything substantive about any of the stuff they are selling?
I remember a time when I enjoyed shopping for books or new electronic widgets, just to focus on two leading categories. These days not so much. It's the loss of freedom thing. Fake and manipulated choices, and how dare you be a "difficult to satisfy" customer!
Re: (Score:2)
Re: (Score:2)
Mostly the ACK, but I am curious if this is part of the scam where Amazon offloads all of the work onto the manufacturer or importer? Did the merchandise in these cases ever pass through an Amazon warehouse?
Re: (Score:3)
how much of the blame belongs to Amazon
Almost none, IMNSHO, rather it's the epidemic of the MBA Disease infecting all of the businesses in the US.
My wife worked at the second-largest brick and mortar retailer in the US for almost 25 years. We used to get their annual statements when we held their stock, which included profiles of all the executives, and were dismayed to see that the last high exec with experience on the sales floor retired about two decades ago. Now it's just a bunch of MBAs who graduated university with their six figures of d
Re: Are you having trouble with your shopping? (Score:1)
Re: (Score:2)
[Not sure how this got posted as AC. I somehow clicked on the option without noticing? If I wasn't logged in, then I somehow dug up this thread anyway? Any I definitely remember writing the reply I repost thusly:]
On the one hand I want to agree with you about the sins of MBAs. Even though some of my best friends are MBAs.
However on the larger hand I think the fundamental value proposition of retail stores is broken. There is a fundamental problem with renting expensive space that is essentially used as a wa
$25 (Score:2, Funny)
After the attorneys take their cut you are looking at maybe $25 back which is far less than a Prime subscription.
Re: (Score:3)
After the attorneys take their cut you are looking at maybe $25 back which is far less than a Prime subscription.
$1.5 billion to an estimated 35 million customers is about $43 per customer. Still not much given the $139 that the customers were ostensibly cheated out of. Assuming a $139 refund for just one year to those 35 million customers would be total of $4.86 billion. Given that Amazon knew they were disadvantaged in this case, how did the government wimp out and ask for just $43 per customer instead of $139?
More importantly, I wonder what the potential punishment might have been if Amazon was willing to swallo
Re: (Score:3)
More importantly, I wonder what the potential punishment might have been if Amazon was willing to swallow a $2.5 billion penalty.
Having to give details about their internal operations in the courtroom, most likely. Way more damaging than any likely direct monetary penalty.
Re: (Score:3)
If Amazon was feeling super evil, they would "refund" the money by giving the impacted Prime subscribers a "free" 2 months of service.
And then start charging them a monthly fee again once the "new trial" was over :)
Re: (Score:2)
Verizon tends to do that sort of thing. People who hate Amazon and Google obviously don't pay attention to the crap that Verizon has been doing over the years.
Crime pays after all (Score:4, Informative)
Pocket change compared to what they've earned from all the subscriptions. Cost of business.
Re: (Score:3)
They spent all the subscription money buying movie studios and producing content. Meanwhile, they decided that money wasn't enough for you to watch that content ad-free. Because shipping or something.
Shareholders paying to keep Execs out of prison (Score:4, Interesting)
Should have gone to trial regardless of the payout if there was criminal action on the part of those executives. It's time corporate heads stopped being shielded by shareholder dollars.
Re:Shareholders paying to keep Execs out of prison (Score:5, Interesting)
Should have gone to trial regardless of the payout if there was criminal action on the part of those executives. It's time corporate heads stopped being shielded by shareholder dollars.
My favorite statement in the article: "As part of the settlement, Amazon and two of its executives, Prime boss Jamil Ghani and Neil Lindsay, a senior vice president in the company's health division who previously held a role in the Prime business, will be prohibited from unlawful conduct."
Does that imply that absent the settlement, the Amazon executives would not have been prohibited from unlawful conduct? I guess these people do actually play by different rules.
Re: (Score:2)
Maybe it just means that it is no longer a full settlement if they don't hold up that requirement and it goes back to trial.
Re: (Score:3)
The entire point of the legal entity known as a corporation is for the executives in the corporation to avoid having any true consequences for their decisions. If we started holding them accountable, Wall Street would get upset, and we all know we can't have Wall Street upset. Why, their every whim is the entire purpose of society at large.
I cancelled Prime during the protests (Score:2)
I've been paying for Prime since July 2008. Kind of fed up with the various B.S. that Bezos has done over the years and felt it was a good time to drop the service.
I still have an Amazon account, I'm slowly pulling my digital content off there so I'm not completely screwed. It's mostly music, and most of it I have the CD for, but sorting out which albums I don't have the physical copy of takes a little time with their horrible UI.
I doubt cancelling my membership will cause Bezos to lose any sleep. But I at
but did anything change? (Score:2)
was it part of the settlement that Amazon must make it "one click easy" to unsubscribe? and have that button be easily discoverable?