When the U.S. Federal Trade Commission announced it had settled its “dark patterns” lawsuit against Amazon last month, leaders at the antitrust and consumer protection watchdog celebrated.
“Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” FTC chair Andrew Ferguson said. Ferguson, whom Trump appointed chair in January, is, of course, duty-bound to champion the deal as a victory for consumers and the administration. But the real impacts and costs of the agency’s deal with Amazon are more complicated.
The agency struck the deal just days into a trial in which it had accused Amazon and three executives of knowingly tricking millions of shoppers into signing up for Prime memberships without their consent, then making those memberships nearly impossible to cancel. To end the trial early, Amazon agreed to pay billions to the government and shoppers, and to change its most nefarious Prime practices.
In one sense, Ferguson was right to boast: The settlement was a victory for the agency and consumers. The $1 billion civil penalty against Amazon is a record amount, and the additional $1.5 billion refunded to bamboozled Prime members is the second-highest penalty the FTC has secured for ripped-off shoppers. And the regulatory future is more important than the past: forcing Amazon to make signing up for and canceling Prime easier is a major win for customers.
But for the FTC, settling a trial early comes with lost opportunities. The strength of our consumer protection and fairness laws depend on case law and court precedents. Every trial that results in a decision is a stepping stone to the next case, and the next, and the next.
The case was one of just a few government-backed cases to be brought under the Restore Online Shoppers’ Confidence Act, or ROSCA, an Obama-era law specifically intended to stop consumers from being enrolled in online subscriptions without their consent. The FTC has increasingly used ROSCA to try to win monetary damages from lawbreakers since 2021, when the Supreme Court handcuffed the agency’s ability to win damages under its own law, the FTC Act.
When the FTC wins in court, which it appeared very likely to do, it makes bringing and winning the next ROSCA lawsuit against a predatory or deceptive company that much easier. Likewise, when the government takes the chicken exit instead of seeing a trial through to its conclusion, it makes the same job harder for future FTC commissioners and staff.
The Amazon lawsuit was by far the closest a ROSCA case has come to a jury trial and a decision of liability. The documents already made public during the litigation were objectively terrible for Amazon; indeed, the company named its Prime cancellation maze the “Iliad Flow” after Homer’s poetic description of the arduous Trojan War — a four-page, six-click, 15-option gauntlet Prime shoppers must endure to end their memberships. Much more about Amazon’s business model and its reliance on Prime as fuel for its online shopping monopoly would have likely come to light during trial. By backing out of the trial early, the FTC likely left good case law on the table and the public in the dark.
As a matter of policy, settling a case also sends a message to corporate wrongdoers that, if they’re willing to pay up and make a few changes to their corporate behavior, they can get off the hook. Amazon has been variously accused of all sorts of wrongdoing, from illegally monopolizing e-commerce, to labor violations at its warehouses and sorting facilities, to turning a blind eye to knock-offs on its site. Executives are behind all of those decisions, and three top Amazon executives in charge of the Iliad Flow — Neil Lindsay, Russel Grandinetti, and Jamil Ghani — were on the hook in the dark patterns case.
When government prosecutors have a company with Amazon’s track record of alleged abuse in its sights, and specifically names the executives responsible for those abusive corporate practices, it builds good policy by seeing the case through to its conclusion — especially when the FTC was by all accounts winning. Settling sends a message to other wrongdoers: If a company like Amazon can get away with ripping off its customers, surely we can too. That’s bad policy.
The FTC will likely get another chance to do the right thing. At the moment, the government’s monopolization trial against Amazon is on track to begin in February 2027. The lawsuit strikes at the heart of Amazon’s wealth and power in e-commerce. A ruling in favor of the FTC could lead to monumental changes to Amazon’s current exploitative business model, including a possible breakup. The stakes of that case are far too high; no settlement should suffice.
This originally appeared on Inequality.org.
