Lina Khan, nominee for Commissioner of the Federal Trade Commission (FTC), speaks during a Senate Committee on Commerce, Science, and Transportation confirmation hearing on Capitol Hill in Washington, DC, April 21, 2021.
Saul Loeb | Pool | Reuters
Amazon accused the Federal Trade Commission of harassing executive chairman Jeff Bezos and CEO Andy Jassy by asking them to testify in its investigation of the company’s Prime subscription business, acknowledging the probe in a filing dated August 5 that was recently made public.
The FTC has been probing Amazon’s Prime business over concerns that it misleads how users sign up or cancel their Prime subscriptions. Insider reported in March on internal documents that showed “the company has been concerned since at least 2017 that user interface designs on Amazon.com have led customers to feel manipulated into signing up for Prime” but reportedly didn’t implement changes for fear they would negatively impact subscription growth.
An Amazon spokesperson at the time told Insider that Prime’s cancelation and sign-up process are “simple and transparent and clearly present customers with choices and the implications of those choices.”
Amazon is seeking to limit or quash civil investigative demands, similar to a subpoena, issued to the company and to individual current and former employees, according to the filing. It’s also seeking to quash CIDs issued to Bezos and Jassy, arguing staff has not given a legitimate reason for needing their testimony because it could obtain the same information it seeks elsewhere.
Lawyers for the company said in the filing that the FTC’s demand for Bezos and Jassy to testify at an investigational hearing “on an open-ended list of topics on which they have no unique knowledge is grossly unreasonable, unduly burdensome, and calculated to serve no other purpose than to harass Amazon’s highest-ranking executives and disrupt its business operations.”
An FTC spokesperson declined to comment.
Amazon said it cooperated with staff for more than a year, providing information about its sign-up and cancellation process for Prime, for a probe it said began in March 2021. It said it produced about 37,000 pages of documents and met with staff on multiple occasions to answer questions.
But eventually, “staff inexplicably disengaged,” Amazon charged. After about six months of silence, Amazon alleged, FTC staff told the company in April that a new attorney would take over the probe while under “tremendous pressure” to conclude the investigation before the fall. Amazon said this was the first it heard of such a deadline and it soon received a new CID in June that “accelerated” and “expanded” the scope of the investigation to “at least five additional non-Prime subscription programs,” including Audible, Amazon Music, Kindle Unlimited and Subscribe & Save, and added nearly 20 individual CIDs served to current and former employees’ homes.
The June CID on the company is “unworkable and unfair,” Amazon said, though it added it’s still committed to getting staff the information it needs. If the commission won’t quash the CID, Amazon requested it at least extend the deadline for the information to Sept. 15, rather than August 5.
Amazon has had a tricky relationship with the FTC under Chair Lina Khan, who rose to prominence with her 2017 Yale Law Journal article, “Amazon’s Antitrust Paradox,” which argued for a rethinking of antitrust enforcement in digital markets that would reshape industry practices. Last year, Amazon sought Khan’s recusal from its antitrust probes, arguing her past public comments about the company suggest she would not be an impartial voice in matters against the firm.
Khan has said in the past it takes “courage” to take on companies with vast power and resources. In a January interview with CNBC’s Andrew Ross Sorkin and contributor Kara Swisher, Khan said the FTC was “really showing these companies, but also showing the country, that enforcers are not going to back down because of these companies flexing some muscle or kind of trying to intimidate us,”