Amazon’s Baltimore fulfillment center
WASHINGTON – The Federal Trade Commission’s recent massive settlement with Amazon was reached just in time, as the government shutdown now has the agency’s attorneys unable to work on their other cases.
On Sept. 25, the FTC announced a $2.5 billion agreement with Amazon over allegations it tricked customers into enrolling in the Prime program then made it difficult for them to cancel. It came during a trial in Seattle federal court, where decisions from Judge John Chun had left the company vulnerable to a giant verdict.
Though the case was filed under former President Joe Biden’s FTC chair Lina Khan, President Trump’s chair Andrew Ferguson said, “Today, the Trump-Vance FTC made history…”
An estimated 35 million consumers will take their pieces from a $1.5 billion compensation fund, while a $1 billion penalty is the largest in a case involving an alleged FTC rule violation.
The FTC's Prime case made far fewer headlines than another lawsuit filed by the FTC during the Biden Administration that alleged antitrust violations. That suit targets Amazon’s practice of not allowing third-party vendors to charge lower prices on other platforms, even though those vendors must pay Amazon a percentage of sales on Amazon.
A week after the Prime settlement, FTC lawyers asked to stay the antitrust case. With Congress unable to agree on a budget, funding for the FTC expired on Sept. 30 at 11:59 p.m.
FTC staff are currently prohibited from working even as a volunteer except in emergencies “involving the safety of human life or the protection of property.”
Fortunately for them, they wrapped up the Prime case before the shutdown.
The FTC alleged violations of the Restore Online Shoppers' Confidence Act, a 2010 law that targets so-called "negative option" transactions. Amazon has said the FTC had never before used ROSCA in this way and sought memos through the years it hoped would show it was not on "fair notice" that it could face ROSCA liabilities.
Chun denied that request in August. He cited a previous case from Texas that found "regulated parties have no access to an agency's internal deliberations; thus, these communications should have no bearing upon whether the agency has given fair notice."
Chun also denied motions to depose the FTC on official public statements and compel production of internal discussions on ROSCA.
