The FTC won a partial summary judgment victory in its case against Amazon last week, which claims that Amazon tricked tens of millions of customers into signing up for Prime membership and made it hard to quit, in violation of the Restore Online Shoppers' Confidence Act.
Amazon argued that it obtains consent to use a customer’s billing information at the same time it discloses Prime’s terms, but Judge John Chun ruled that “no reasonable jury could find in favor of Amazon” after viewing evidence showing Amazon's purchase and billing flow.
Even more remarkable is that the FTC successfully supported with evidence that three of Amazon's senior executives — Neil Lindsay, Jamil Ghani, and Russell Grandinetti — had direct authority and oversight over Prime enrollment and were aware of customer complaints, but continued the practices in question anyway, and now two of those execs may be held personally liable for any violations that are proven at trial.
The FTC has, on occasion in the past, pursued individual liability when it could show that management had control over practices and were indifferent to violations. However most prior examples involved smaller companies that were founder-operated. What makes this Amazon case unusual is that the FTC is targeting senior executives.
The outcome of the trial could set a major precedent in the U.S. and could bring some much needed accountability to senior executives at major companies.
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