PHOENIX (CN) - Arizona Attorney General Kris Mayes can proceed with her lawsuit, accusing Amazon of deception and unfair business practices, after a state judge denied the tech giant's motion to dismiss.
In an order published Tuesday morning, Maricopa County Judge Dewain Fox found that the state adequately pleaded its claim that Amazon violates the Arizona Consumer Fraud Act by intentionally thwarting attempts to cancel Amazon Prime subscriptions.
"As the state correctly points out, representations do not necessarily need to be false or inaccurate to give rise to an ACFA claim," Fox wrote in a seven-page ruling. "ACFA also encompasses deceptive representations."
That deceptive representation, according to Mayes, is the phrase "cancel anytime" presented to new customers when prompted to subscribe to Amazon Prime. To cancel a Prime membership, consumers are routed to multiple pages asking if they are sure they'd like to cancel, prompted to click "no" to multiple deals, and given the option to temporarily pause their subscription rather than immediately cancel. Though true that customers can cancel their subscription whenever they'd like, Mayes says in her complaint that the average consumer can be easily tricked into keeping their subscription with the promise of future deals or frustrated by the process to the point of just giving up.
"Technical correctness of the representation is irrelevant if the capacity to mislead is found," Fox wrote, noting that he has not, at this pleading stage, determined whether "cancel anytime" is a deceptive representation, but only that the state has pleaded its case adequately to avoid dismissal.
In a Phoenix courtroom in August, Amazon attorneys argued the state failed to claim that the multimedia conglomerate omitted any specific relevant information regarding Prime cancellation. They claim the Arizona Consumer Fraud Act requires no pre-sale description of a service's cancellation process, nor limits the number of clicks necessary to complete a cancellation. Therefore, the omission of cancellation information is immaterial to the state's claim.
But Fox agreed with the state's view that "the alleged omission is material under Amazon's own authority because the omission is logically related to the transaction in which it occurs and rationally significant to the parties in view of the nature and circumstances of the transaction."
"This test requires an examination of the specific purchase transaction, its nature and circumstances," Fox wrote.
Richie Taylor, a spokesperson for Mayes, said in an email that the attorney general agrees with the ruling but will not comment further on the ongoing litigation.
Mayes filed two separate lawsuits against Amazon in 2024, one regarding Prime cancellation and the other claiming the website's algorithm pushes internal profit over third-party sellers. The latter is now in discovery.
Fox dismissed Mayes' initial Prime complaint last year, finding that her claims applied to "the operation of its member services," rather than "in connection with the sale or advertisement of any merchandise." Fox gave Mayes leeway to amend her complaint, which she re-filed in February. Fox says the new complaint adequately connects the state's deception and misrepresentation claims to the sale of the Prime subscription by arguing the company's "cancel anytime" messaging and omission of cancellation steps are paramount to the sale of the subscription.
Amazon has not replied to a request for comment.
Source: Courthouse News Service
