Amazon Says Its Enroll/Cancel Practices Don't Violate 'Rarely Invoked' ROSCA

The FTC “seeks to establish an entirely new theory of legal liability based on misleading and subjective characterizations of unremarkable marketing techniques,” said the FTC’s Wednesday motion to dismiss (docket 2:23-cv-00932) the commission’s amended complaint in U.S. District Court for Western Washington in Seattle. Under basic principles of due process, any modification of the law must occur through legislation or regulation, “and not through enforcement actions seeking to impose massive and retroactive civil liability,” it said.

Amazon’s Prime enrollment and cancellation processes, which it calls “flows,” don’t violate the Restore Online Shoppers’ Confidence Act (ROSCA), said Amazon. It said the flows “prominently and repeatedly” disclose key terms like Prime’s price and automatic renewal feature, “which confirms that they comply with current law."

ROSCA was enacted in 2010 to prohibit conduct entirely different from that alleged in the complaint, Amazon said. It described the “the then-common practice" of “third-party upsells of products or services made during check-out for an initial purchase,” where a consumer buying sneakers from one company might be enrolled in a magazine subscription from another. ROSCA was “rarely invoked, was cited in only a handful of opinions, and resulted in no significant judgments against legitimate businesses,” the memorandum said.

Prime flows satisfy ROSCA’s requirements, in any case, Amazon said. When consumers sign up for Prime, they're presented with the material terms of enrollment in “clear and conspicuous language,” they provide informed consent to being charged for membership and they're given “multiple simple mechanisms to cancel,” said the motion. The 9th Circuit U.S. Court of Appeals and courts across the country “routinely” grant motions to dismiss where an “objective review of the challenged webpages show their legality,” Amazon said, citing Hall v. Time. There, the district court concluded that an automatic renewal notice appearing on the checkout page satisfied “clear and conspicuous” and “visual proximity” requirements under California’s Automatic Renewal Law, it said.

The FTC sought to “avoid such a dismissal in this case,” said Amazon, by announcing a “new ‘dark patterns’ theory,” using “vague and undefined concepts such as ‘visual imbalances’ and ‘manipulative design elements,’” it said. In a case “supposedly about clarity, the FTC’s purported standards are unconstitutionally opaque,” it said, asking what font size and colors comply with the agency’s view of balance. “How many clicks on a website is too many for the FTC?” it asked, and how much persuasive messaging does the FTC deem lawful and what amount is “unlawful ‘manipulation’?” it said. The FTC adopted an “improper sue-first-and-create-rules-later tactic,” it said, and the FTC's “we know it when we see it approach should be rejected and the Complaint should be dismissed.”

Amazon showed screenshots of its notices of terms and conditions in support of its assertions it doesn’t violate ROSCA. One page customers use to start a 30-day free Prime trial had a blue hyperlink to terms plus boldface messaging saying customers who don’t cancel within 30 days will be charged $12.99 monthly. Enrollment flows follow best practices “expressly recommended by the FTC,” said the memorandum. It noted courts referenced Amazon’s “conspicuous notice” in other lawsuits, citing Heinz v. Amazon, in which the court said Amazon’s terms were “contained in language directly below” action buttons.

On the FTC's allegation that Prime’s enrollment flows fail to obtain consumers’ express informed consent, the memorandum cited the 9th Circuit Court's ruling in Oberstein v. Live Nation Entertainment, saying “an unambiguous manifestation of assent” occurs when a website asks the consumer to take some action, such as clicking a button or checking a box after being told doing so means they agree to terms of use, it said. Prime customers are told that clicking a button will enroll them in Prime or a free trial period, it said.

Amazon disputed the FTC’s claims that ingresses in Prime’s cancellation flows are difficult to find. “Few online tools are more intuitive and commonly used than a search bar, which appears at the very top Amazon’s home page and provides a direct ingress into Prime’s cancellation flow,” it said. Members can also initiate the cancellation process by using Amazon’s online chat feature, it said.

Prime’s enrollment and cancellation flows “speak for themselves,” satisfy ROSCA requirements, and are “dispositive to this Court’s analysis,” said the memorandum. The FTC relies on a “vague theory” to allege an interpretation of law the FTC “itself admits lacks specificity and fails to provide necessary guidance to businesses.” Imposing civil liability in these circumstances “would violate Amazon’s right to due process and fair notice,” it said.