U.S. Judge Rules Amazon Broke Shopper-Protection Law Over Prime Signups - What the Ruling Means

A U.S. federal judge has handed the Federal Trade Commission (FTC) a significant pre-trial win in its long-running case against Amazon, finding that the company violated the Restore Online Shoppers’ Confidence Act (ROSCA) by collecting customers’ billing information before providing clear Prime subscription terms. The ruling tightens the FTC’s case as a jury prepares to decide whether Amazon used misleading design and cancellation practices to enroll millions of people in Prime. Reuters+1

What the judge actually decided

U.S. District Judge John Chun ruled that the FTC can proceed with its claim that Amazon violated ROSCA, a statute that bars merchants from charging consumers for goods or services when the merchant doesn’t clearly disclose the material terms and obtain informed consent. Judge Chun concluded there is enough evidence for a jury to consider whether Amazon gathered payment information from shoppers before disclosing Prime’s recurring charges and subscription terms, a timing the FTC argues is illegal under ROSCA. Reuters

The judge also left open the possibility that two Amazon executives could be held personally liable if the jury finds the company violated the law, a development that could increase pressure on Amazon and raise the stakes well beyond corporate liability. Courthouse News+1

The FTC’s case: dark patterns, the “Iliad” cancellation flow & internal warnings

The FTC’s complaint centers on three broad assertions:

1. Misleading checkout design - The agency highlights examples where Amazon’s checkout UI emphasized a large, brightly colored button that triggered Prime sign-up, while the option to decline Prime was styled as a small text link. The FTC argues those design choices are classic “dark patterns” that nudge consumers toward enrollment without fully informed consent. NHPR

2. Billing-before-disclosure - The judge’s ROSCA finding is focused on timing: Amazon allegedly collected customers’ payment details before clearly presenting Prime’s recurring subscription terms and costs, undermining consumers’ ability to give informed consent. Reuters

3. A labyrinthine cancellation process - The FTC calls the cancellation journey the “Iliad Flow,” alleging it forced customers through many menus, pages and options (the agency describes it as a four-page, six-click, 15-option process) to cancel, a deliberate friction that kept some users paying. NHPR

In support of its theory the FTC will introduce internal Amazon documents showing employees raised concerns about confusing disclosures and proposed clearer alternatives between 2017–2022, suggestions the complaint says were repeatedly rejected. The FTC’s expert also estimates