Amazon has filed a legal complaint accusing the Federal Trade Commission of "harassing" current and former executives, including founder Jeff Bezos and current CEO Andy Jassy, as part of a probe into how Amazon’s Prime subscription program attracted and kept members.
In the August 5 filing, Amazon said the probe has become "unduly burdensome" because of administrative subpoenas—also referred to Civil Investigative Demands (CIDs) in the filing—that had been delivered to personal homes or on holiday weekends, as well as to top-level executives (specifically Bezos and Jassy) who allegedly "have no unique knowledge.” The complaint suggests that taken all together, these subpoenas are "calculated to serve no other purpose than to harass Amazon's highest-ranking executives and disrupt its business operations.”
Since March 2021, the FTC has been investigating Amazon Prime—the subscription program that offers free delivery, access to a video streaming service, and more, for $139 each year—which serves as a key driver of the company’s growth thanks to its hundreds of millions of members and, now, nearly $9 billion in revenue last quarter.
The complaint, which Insider first reported on, subpoenas current and former executives such as Jassy and Bezos, as well as former retail chief Dave Clark and his replacement Doug Herrington.
In March, Insider obtained internal Amazon documents that showed the company was aware its sign-up process for Prime was confusing for customers and led to accidental sign-ups. Amazon had even been "deliberately confusing," one source told Insider. So-called "dark patterns," which are used to influence customers through confusing images and ambiguous language, are the main subject of the FTC's probe into Prime.
Last year in December, the FTC warned it would be cracking down on fraudulent practices such as dark patterns because consumer complaints were increasing. In Amazon's most recent legal filing, it maintains that, "As anyone who has signed up for or canceled a Prime membership already knows, the process is clear and straightforward under any reasonable definition."
In its ongoing investigation, the FTC asked Amazon to identify how many consumers it signed up as "nonconsensual enrollees" as well as how many it retained by complicating the cancellation process (also known as "diverted cancels"). The probe encompasses not only Prime, but other Amazon programs such as Audible, Amazon Music, Kindle Unlimited, and Subscribe & Save.
Amazon’s complaint insists it has cooperated with the FTC since the investigation was launched in March last year and provided tens of thousands of pages of documents, but that FTC staff began to act strangely in April 2022 once a new attorney took over and expanded the Prime investigation into other programs.
Amazon claims it was told by FTC staff that they faced "tremendous pressure" to conclude the investigation within a few months and demanded documents on an accelerated timeline of an expanded scope. Additionally, Amazon's complaint insists the FTC prevented targets of subpoenas from using the law firm representing Amazon.
This isn't the first time Amazon has cried foul over FTC investigations. In June 2021, Amazon tried to petition for the recusal of Chair Lina Khan from any Amazon investigations, citing her legal experience and scholarship as evidence that she wouldn’t accept pro-monopoly arguments with “an open mind.”
Over the past year, the scrutiny on Amazon has increased not just at the FTC but in Congress and in other countries. In Congress, antitrust scrutiny culminated in a sweeping bill that Amazon in particular has been lobbying hard against, but the bill has been delayed to at least after the August recess. In Europe, it has been under antitrust scrutiny for years and in July attempted to end the investigation by offering to change some anticompetitive practices.