Amazon Caught Violating Shopper Rights in FTC Case
A U.S. federal judge has ruled that Amazon violated consumer protection laws by collecting payment information from Prime subscribers before clearly disclosing the program’s terms. The decision, issued by District Judge John Chun on September 18, 2025, gives the Federal Trade Commission (FTC) an important early win in its ongoing lawsuit against the online retail giant. The FTC alleges that Amazon enrolled tens of millions of customers in its Prime membership without their consent and made it unnecessarily difficult for them to cancel. According to the agency, Amazon used “dark patterns,” or manipulative and confusing design tactics, to steer customers into recurring subscriptions and to frustrate their attempts to opt out.
The FTC first brought the case in 2023, accusing Amazon of violating the Restore Online Shoppers Confidence Act (ROSCA), a federal law that requires clear disclosure of terms, express consent for charges, and simple cancellation options. Internal documents cited by the FTC suggest that Amazon knew its processes were misleading and even gave its cancellation flow an internal code name, “Iliad,” referencing the famously long Homeric epic to describe how drawn-out the process could feel. Regulators say these practices not only trapped consumers in unwanted subscriptions but also cost them significant money over time.
Judge Chun’s ruling prevents Amazon from arguing that ROSCA does not apply to Prime memberships and also holds two Amazon executives potentially liable if the FTC proves its claims at trial. FTC officials welcomed the decision, saying it confirms that Amazon defrauded consumers by failing to disclose all Prime terms before collecting payment details. The agency has pledged to continue pursuing the case to protect consumers from deceptive digital practices.
Amazon has denied the accusations, maintaining that its Prime signup and cancellation flows are clear and customer-friendly. The company has filed a motion to dismiss the lawsuit and insists it complies with all consumer protection laws. For now, the case will move forward, with a trial expected to determine whether Amazon must change its Prime enrollment process and pay financial penalties or restitution to affected customers.
Amazon is not the first company accused of using these tactics, and it likely will not be the last. Subscription loops, where signing up is easy but canceling is hidden behind multiple clicks, confusing menus, or long wait times, have become a proven profit strategy across industries from streaming platforms to fitness apps. The model works because recurring charges add up even when customers rarely use the service, and lawsuits or regulatory fines often cost less than the revenue generated. Consumers rarely receive significant payouts even when cases settle, leaving companies little incentive to abandon the practice.
This ruling carries weight beyond Amazon. It signals to other subscription based companies that courts and regulators are increasingly willing to crack down on hidden terms and complicated cancellation methods. As the case proceeds, it could set a new standard for how online services must obtain consent and provide transparent, easy to use options for consumers who want to leave.
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