The Amazon.com founder and CEO will both be forced to deal with allegations that customers were tricked into signing up for its Prime service, the Federal Trade Commission (FTC) said Wednesday — or face federal action.
The announcement comes as the government regulator continues to investigate claims that Amazon illegally transferred its Premiere membership program to users and jailed them without providing easy ways to cancel its recurring fees.
Now Jeff Bezos and his chief lieutenant Andy Jassy must address those allegations no later than Oct. 7, the agency said, cutting off the online seller’s efforts to excuse the couple from testifying at the federal trial.
Jeff Bezos and his chief lieutenant Andy Jassy must deal with allegations that Amazon illegally pushed the membership program without providing easy ways to cancel its recurring fees by Oct. 7, the FTC said Wednesday, or face federal action
The company asked the FTC last month to lift subpoenas for Bezos – who is reportedly worth $145 billion – and his successor Jassy, who succeeded him as CEO just over a year ago.
At the time, Amazon argued that the high-profile couple wasn’t privy to the details of Prime’s sign-up and cancellation processes — the main focus of the investigation.
Bezos, who is rumored to be in talks with the Phoenix Suns to buy the NBA team, was spotted cuddling with NFL commissioner Robert Goodell at the Chiefs-Chargers game in Kansas City last week after Amazon secured the rights had to stream games exclusively outside of local broadcast networks to Prime members.
FTC officials launched the broad investigation in March 2021, looking into whether the company misled customers with a predatory marketing strategy and an intentionally difficult-to-navigate user interface that made it difficult to cancel its Prime service.
A membership for Prime, which gives users perks like free product delivery and access to Prime Video’s extensive library, costs $14.99 per month, or $139 if users put up the money for a full year.
A Prime Video membership alone costs members $8.99 per month.
FTC officials launched the broad investigation in March 2021, looking into whether the company misled customers with a predatory marketing strategy and an intentionally difficult-to-navigate user interface that made it difficult to cancel its Prime service
On Wednesday, FTC officials ordered both Bezos, 58, and Jassy, 54, to comply with the investigative request, while also ordering Amazon to comply with a June investigative request seeking information about other subscription programs, that Amazon operates, such as Subscribe and Save’ service.
Amazon had also resisted this request, arguing that it was too complex and exhaustive in view of the goals of the current investigation.
At the time, a company official wrote that the subpoena for both Bezos and Jassy “serves no purpose other than to harass senior Amazon executives and disrupt business operations.”
A spokesman for Amazon said the company was cooperating with the FTC in the investigation and has already siphoned off over tens of thousands of pages of classified internal documents.
“We remain concerned that recent requests are overly broad and unnecessarily onerous and we will evaluate all of our options,” the company said on Wednesday.
The representative added that the company was “disappointed but not surprised that the FTC largely declined to rule against itself.”
Wednesday’s order denying Amazon’s request was authored by Republican Commissioner Christine Wilson (pictured). Under the commission’s rules, Amazon will have the right to appeal the decision to its five members to limit – or even nullify – the agency’s decision
Wednesday’s order denying Amazon’s request was authored by Republican Commissioner Christine Wilson.
Under the commission’s rules, Amazon has the right to appeal the decision to its five members in a bid to narrow — or even nullify — the agency’s almost unanimous decision.
Regarding a possible appeal, Amazon wrote in its statement on Wednesday that “we will review all of our options.”
The three Democrats on the commission also signed Wilson’s order with the The only other Republican member of the FTC, Noah Phillips, sat back on the matter.
FTC Chair Lina Khan, the most progressive of the FTC Democrats, has criticized Amazon and other tech companies in the past, spurring the online seller to call for the official’s exclusion from the investigation — a demand the commission also rejected.
Khan, who teaches at Columbia Law School, is one of the most prominent antitrust thinkers in the United States and has long pushed for stricter antitrust laws, or at least stricter enforcement of existing laws.
The FTC declined to comment on the ongoing investigation.
The latest decision comes amid rising tensions between Amazon and the FTC, which under Chair Lina Khan, the most progressive of the FTC Democrats, has sought to crack down on sometimes benign big tech regulations
The latest decision comes amid rising tensions between Amazon and the FTC, which under Chairman Khan has sought to crack down on the sometimes benign regulations governing big tech.
It further demonstrates the depth of the FTC’s investigation, which has expanded to include nearly half a dozen Amazon services — including audiobook program Audible, Amazon Music, Kindle Unlimited, and Subscribe & Save — a service that lets users sign up for deliveries with a subscription-based model.
The service will automatically bill users on a weekly and monthly basis – this is the pay structure for other services offered by the company that are now under scrutiny.
Amazon has an opportunity to appeal the decision but has until October 7 to deal with the FTC’s order. Both Bezos and Jassy are yet to comment on the agency’s allegations. The investigations are still ongoing.
Bezos, who has yet to comment on the allegations, was spotted cuddling with NFL boss Robert Goodell at the Chiefs-Chargers game in Kansas City last week after Amazon secured the right to exclusively broadcast games off-local Stream Prime members