Amazon criticizes ‘burdensome’ FTC probe into Prime
Amazon.com Inc (AMZN.O) confirmed that the Federal Trade Commission (FTC) has been investigating sign-up and cancellation processes for its Prime program since March 2021
The probe was previously reported by Business Insider, but Amazon made the probe public in a recently posted petition with the FTC that questioned what it called the agency’s “burdensome” requests and said the commission was harassing senior executives.
In an Aug. 5 filing, Amazon said the commission first sent a investigative demand for information in March 2021 in the Prime probe and in June expanded its requests for additional non-Prime subscription programs including Audible, Amazon Music, Kindle Unlimited and Subscribe & Save. Amazon says the expanded requests for information are “overly broad and burdensome.”
The FTC probe has looked at steps customers must take to cancel or enroll in Prime.
Amazon said it produced 37,000 pages of documents and “repeatedly met with staff to answer its questions.”
Amazon wants the FTC to extend the length of time allowed to respond to requests for comments and get a chance to respond to the FTC’s “new and expanded demands.”
An FTC spokesman declined to comment.
Amazon said the FTC was seeking to “harass” both its current chief executive Andy Jassy and former CEO and current executive chairman Jeff Bezos by demanding they testify at an investigative hearing “on an open-ended list of topics.”
Amazon called that “grossly unreasonable, unduly burdensome, and calculated to serve no other purpose than to harass Amazon’s highest-ranking executives and disrupt its business operations.”
The e-retailer said it learned in July that FTC staff had begun attempting to serve individual investigative demands “at the homes of certain current and former Amazon employees.”
In a statement on Tuesday in response to the Prime probe, Amazon said: “We make it clear and simple for customers to both sign up for or cancel their Prime membership.”
In February, Amazon raised the price of its Prime program. U.S. monthly fees for the fast-shipping and media service rose to $14.99 from $12.99, and annual membership went up to $139, from $119.
With more than 200 million members globally, Prime is an incentive to consumers to direct more of their shopping to Amazon. Revenue from such fees for the fourth quarter rose 15% to $8.1 billion.
The FTC is chaired by Lina Khan, who gained attention with a 2017 article in the Yale Law Journal titled “Amazon’s Antitrust Paradox.” The agency has opened a broad antitrust probe into Amazon as part of government antitrust investigations begun under the Trump administration. The investigations are also looking at Meta Platforms Inc’s (META.O) Facebook and Alphabet Inc’s (GOOGL.O) Google.