WASHINGTON—
Amazon.com Inc.
AMZN 1.11%
is accusing the Federal Trade Commission of making excessive and unreasonable demands on founder
Jeff Bezos
and company executives as the agency probes Amazon’s Prime membership program.
In a petition to the FTC filed earlier this month and recently made public, Amazon says the agency’s demands on the company have been “overly broad and burdensome,” and its legal tactics have been unfair.
It specifically requests that the FTC quash civil subpoenas issued to Mr. Bezos and Chief Executive
Andy Jassy,
contending that the FTC hasn’t identified a reason why their testimony is necessary.
An FTC spokeswoman declined to comment.
The commission launched the Amazon investigation and it wasn’t immediately clear how it would respond to the company’s request. But the 49-page filing offers a glimpse into the FTC’s investigative practices, at least through Amazon’s lens.
The filing offers further insight into the FTC’s focus on so-called dark patterns—online platform-design tactics intended to manipulate users into signing up for unwanted or unnecessary services, or to prevent them from canceling.
Dark patterns have been a particular concern for FTC Chairwoman Lina Khan, and the agency last year issued a new enforcement-policy statement warning companies against deploying them.
Seattle headquarters of Amazon, which contends that its sign-up and cancellation processes are clear and straightforward.
Photo:
David Ryder/Getty Images
The FTC’s original civil subpoena to Amazon said its Prime investigation focused on whether the company has engaged in unfair or deceptive practices by automatically enrolling consumers in the service, or failing to provide a simple mechanism for them to stop recurring charges, according to Amazon’s petition.
The Amazon filing, which was earlier reported by Business Insider, contends that its sign-up and cancellation processes are clear and straightforward.
To be sure, legal disputes over the scope of government investigations are common. Still, the Amazon petition also could provide further ammunition for business critics of Ms. Khan, who has become a target for groups such as the U.S. Chamber of Commerce who say she is overstepping her authority.
“The FTC is proving time and time again under Khan’s leadership that it isn’t acting in good faith, it’s not acting within the law, and is intent on hurting tech,” said Carl Szabo, vice president and general counsel of NetChoice, an industry-backed group that favors market-oriented policies toward the internet.
Among other claims, the Amazon filing asserts that the agency staff has come under pressure from FTC brass to wrap up the investigation later this year and has made excessive and unreasonable demands for information.
The FTC has been investigating Amazon’s marketing and cancellation practices for its Prime subscription service since March 2021, according to Amazon, which said that the probe has expanded into other subscription programs.
Under Chairwoman Lina Khan, the FTC has taken a more aggressive stance on enforcement.
Photo:
Tom Williams/Zuma Press
Those other programs include Audible, Amazon Music, Kindle Unlimited and Subscribe & Save, according to Amazon’s petition.
Amazon says it produced about 37,000 pages of documents in response to the agency’s initial demands. The company says the FTC staff unexpectedly disengaged from the investigation for several months.
Then in April, the company says it was notified that the FTC had put a new attorney in charge of the investigation and that staff was under “tremendous pressure” to finish the investigation—and was under instructions to make recommendations on the case before the fall.
At the same time, the staff increased its investigative demands and imposed tight deadlines for complying. The FTC also sought the testimony of almost 20 current and former Amazon employees by delivering requests to their homes, according to the petition.
The FTC under Ms. Khan has taken a more aggressive stance on enforcement. Amazon had previously sought, without success, for Ms. Khan to recuse herself from the investigation based on her past critical statements of the tech giant.
According to the Amazon petition, the FTC staff also has attempted to prevent Amazon attorneys from representing individual employees, according to the petition. The company says that is unfair.
The company also complained that the FTC is unfairly demanding to question Messrs. Bezos and Jassy about issues they don’t follow closely.
“Preparing either to testify regarding the granular details of business operations for which they have no unique knowledge and no day-to-day responsibilities would be a tremendous burden on them, on counsel and on Amazon,” the petition says.
Under FTC rules, companies can object to investigative demands made by the agency’s staff. The commission has 40 days to respond to the petition. Amazon’s petition seeks to quash or limit the agency’s latest civil subpoena to the company, or at least extend the deadline for compliance to mid-September.
Amazon’s trouble in Washington isn’t limited to the FTC. Democratic and Republican members of the House Judiciary Committee have asked the Justice Department to investigate Amazon and some of its executives for what they said was possible criminal obstruction of Congress.
Amazon is also a target of antitrust legislation that, if passed, would bar it and other online giants from giving preferential treatment to their own products and services, such as steering consumers to in-house products instead of competitors’ offerings.
Write to John D. McKinnon at john.mckinnon@wsj.com and Dave Michaels at dave.michaels@wsj.com
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