The Federal Trade Commission is suing the retailer for alleged deceptive practices

By Mark Huffman of ConsumerAffairs

• A landmark trial begins, as the U.S. Federal Trade Commission moves forward with allegations that Amazon systematically misled consumers into signing up for its Prime membership.

• The FTC claims Amazon used deceptive interface designs so-called dark patterns to enroll users in automatically-renewing Prime subscriptions without meaningful consent, and made cancellation needlessly difficult.

• In recent pretrial rulings, a judge found Amazon violated the Restore Online Shoppers Confidence Act (ROSCA) by collecting billing information before disclosing key membership terms, and also held that Amazon executives could be held personally liable if the FTCs allegations are proven.
  

Millions of people are members of Amazons Prime but the Federal Trade Commission claims some are members against their will and find it hard to cancel.

After years of investigation, legal wrangling, and preliminary rulings, the trial in FTC v. Amazon.com Inc. begins this week in U.S. District Court in Seattle. The FTC is seeking remedies for what it describes as years-long deceptive practices tied to Amazons Prime program.

The allegations include:

• Deceptive signup flows: The complaint says that Amazon routinely presents consumers with options that make Prime subscription a default or overwhelming choice. Buttons enrolling customers tend to be large, prominently displayed, and worded to emphasize benefits (free shipping, trial, etc.), while the option to decline is obscured by size, position, or weaker language.

• Billing before full disclosure: According to the FTC, in many cases, Amazon collected payment information from prospective Prime members before clearly disclosing all the terms of the subscription including its automatic renewal, cancellation requirements, or full cost.

• Iliad cancellation scheme: The FTC alleges Amazon made the cancellation process overly long, labyrinthine, and discouraging. Internally, this complex cancellation path has been referred to as Iliad involving multiple pages, numerous clicks, and many choices or offers intended to persuade customers to stay.

Whats at stake

• The FTC is seeking civil penalties, injunctive relief (changes to how the Prime subscription and cancellation flows are structured), and possibly consumer refunds for people harmed by these alleged practices.

• Amazon strongly denies the claims, arguing that its disclosures are clear, that customers have the requisite information to make informed decisions, and that it has taken steps to simplify cancellation flows in response to feedback and regulatory pressure.

U.S. District Court Judge John Chun has already granted the FTC significant pretrial victories, ruling that Amazon violated ROSCA (Restore Online Shoppers Confidence Act, a U.S. federal law passed in 2010), rejecting motions to dismiss major parts of the FTCs case, and allowing claims of executive liability to move forward.

The case builds on evolving legal scrutiny over dark patterns and subscription models with auto-renewal features. Regulators in the U.S. and abroad have increasingly focused on such practices as potentially deceptive under consumer protection laws.

The outcome of the jury trial may hinge on whether the FTC can prove that users were tricked in a legally meaningful way showing that Amazons interfaces and disclosures failed to give consumers a clear, informed choice.

If the program isn't reauthorized by Congress, major elements could disappear

• The flood insurance program faces a Sept. 30 deadline. Major elements can disappear without Congressional action.
• Participation in the program is already extremely low and sinking fast because of rising premiums.
• Many homes that flood repeatedly drive up a big share of the program's costs.

If Congress does not reauthorize the National Flood Insurance Program (NFIP) by September 30, major parts of the program will expirea lapse that could cause major problems in the mortgage industry.

In past NFIP lapses, borrowers were not able to purchase flood insurance to close, renew or increase loans secured by property that required flood insurance. The Congressional Research Service (CRS) estimated that during a lapse in June 2010, each day more than 1,400 home sale closings were canceled or delayed. That represents more than 40,000 sales each month.

This is an urgent pocketbook issue for many in our state," said Sen. Cory Booker (D-NJ). He and other lawmakers have been looking for a long-term solution to funding the program but their efforts have failed so far.The House has passed. H.R. 5371, legislation that would fund much of the governmentand reauthorize the NFIP until Nov. 21. However, the Senate has rejected that legislation.

Lawmakers are considering lowering caps to annual premium increases, allowing policyholders to pay monthly premiums rather than annual ones, and higher coverage limits for flood damage, among other changes.

Participation low and declining fast

Just 3.3% of U.S. homes had active National Flood Insurance Program (NFIP) policies as of Nov. 2024, marking a second-year of declines and a 0.2% drop from the prior year, according to a report frominsurance website ValuePenguin.

NFIP policies account for the vast majority of flood insurance and provides thebasics, but a smaller share of homeshave private flood insurance that can offerbroader coverage.

"Two years of back-to-back decreases in active flood insurance policies indicates that many homeowners arent fully aware of the growing risks of flooding," said Divya Sangameshwar, ValuePenguin's insurance expert, in the report.

The situation is even worse in 26 states where fewerthan 1% of homes have flood insurance, including Pennsylvania, Colorado and Michigan.

Efforts to find long-term financing fail

If the NFIP is allowed to lapse, the CRS has said that flood insurance contracts entered into before the expiration would continue until the end of their policy term of one year. The authority for the NFIP to borrow funds from the U.S. Treasury would be reduced from $30.425 billion to $1 billion.

Despite repeated efforts, Congress has been unable to enact a long-term NFIP reauthorization. Traditionally, the NFIP has been reauthorized in must-pass short-term and long-term spending measures. The CRS said that the NFIP has been reauthorized in such legislation 33 times since 2017. The last long-term reauthorization was the Biggert-Waters Flood Insurance Reform Act of 2012.

Fast-rising premiums

Under current law, National Flood Insurance premiums can increase by no more than 18% a year. Some lawmakers have suggestedreducing that capto 9%.

The National Flood Insurance Program is distressed by premiums driven by a small share of extremely high-risk properties that repeatedly flood.

As premiums rise, more policyholders move to private plans or forgo flood insurance because they can no longer afford it. Smaller subscriber pools inflate risk and drive up premiums, pushing more policyholders away in a vicious cycle not unlike the one faced byNew Jerseys State Health Benefits Programfor local government workers.

U.S. will take six of seven board seats and Oracle will take control of the site's algorithm

• White House says US companies will oversee TikToks algorithm and Americans will hold six of seven board seats for US operations.

• Oracle, chaired by Trump ally Larry Ellison, will lead data and privacy protections.

• Trump and Xi discussed TikToks future, but Beijing has not confirmed approval of the deal.

White House signals breakthrough in talks

The White House announced over the weekend that US companies will take control of TikToks algorithm and that six of seven board seats in the apps US operations will be held by Americans. Press secretary Karoline Leavitt said a deal could be signed in the coming days, though Chinese officials have yet to comment publicly.

Speaking on the Fox News program Saturday in America, Ms. Leavitt said that we are 100 percent confident that a deal is done, but added in the same breath that the deal had not yet been signed, the New York Times reported.She said that could happen in the coming days.

The move follows years of negotiations over whether TikTok could continue to operate in the United States amid concerns over its Chinese parent company, ByteDance. The app had previously faced the threat of a ban unless its US business was sold.

Oracle to oversee data and privacy

Leavitt saidthat US tech giant Oracle will lead TikToks US data and privacy safeguards. Oracles founder and chair, Larry Ellisonlong a political ally of President Trumpwill play a central role.

The data and privacy will be led by one of Americas greatest tech companies, Oracle, and the algorithm will also be controlled by America as well, Leavitt told Fox News. She added that all of those details have already been agreed upon, with only a final signature needed to seal the deal.

The Ellison family has gained growing influence in US media, with Larry Ellisons son, David, recently acquiring Paramount, owner of CBS News.

Mixed signals from China

President Trump said he and Chinese President Xi Jinping discussed TikTok in a phone call and both approved the deal. He described the exchange as productive in a Truth Social post.

But Beijings response has been less clear. Chinas Commerce Ministry said it welcomed negotiations in accordance with market rules and emphasized that any solution must comply with Chinese law. State news agency Xinhua quoted Xi as welcoming talks, without confirming a final agreement, according to aBBC report.

Dispute over the algorithm

A major sticking point in negotiations has been who controls TikToks powerful recommendation algorithm, which shapes content for its 170 million American users. While Trump sidestepped questions about whether a new algorithm would be needed, the White House has now insisted that control will rest firmly in US hands.

Legal and political backdrop

In January, the US Supreme Court upheld a 2024 law banning TikTok unless ByteDance divested from its US operations. The app briefly went offline before the deadline was pushed back. Trump, who initially called for TikTok to be banned during his first term, shifted course in 2024 and embraced the platform to reach younger voters in his presidential campaign.

The Justice Department has previously warned that TikTok posed a national security threat of immense depth and scale, citing concerns about user data access.

Home-schoolers and MAGA acherents more likely to reject vaccines

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