Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 1 of 59 (2023)

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Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 1 of 59

The Honorable John H. Chun

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

Case No. 2:23-cv-0932-JHC

FEDERAL TRADE COMMISSION,

Plaintiff,

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO

DISMISS AMENDED COMPLAINT

AMAZON.COM, INC., et al.

Defendants.

NOTED ON MOTION CALENDAR:

Friday, December 8, 2023

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 2 of 59

TABLE OF CONTENTS

INTRODUCTION .......................................................................................................................... 1

LEGAL STANDARD..................................................................................................................... 2

ARGUMENT .................................................................................................................................. 2

AMAZON FAILED TO CLEARLY AND CONSPICUOUSLY DISCLOSE

PRIME’S MATERIAL TERMS (COUNT II).................................................................... 3

The Context Within Which Amazon Displays Prime’s Material Terms

Makes It Unlikely Consumers Will Notice Them. ................................................. 5

Amazon Gives Consumers No Reason to Look for, or Notice, Its

Small-Print UPDP Disclosures. .................................................................. 7

Amazon’s “SPC” Page Hides Prime’s Material Terms Until After

Consumers Agree to “Try Prime.” ............................................................ 11

Even Ignoring Context, Amazon’s Disclosures of Material Terms Are Not

Clear and Conspicuous. ........................................................................................ 13

Amazon Knows, Based on Evidence from Its Own Customers, That Ordinary

Shoppers Do Not See Prime’s Material Terms. .................................................... 16

Amazon Impermissibly Discloses Prime’s Terms and Conditions After

Obtaining Billing Information. ............................................................................. 18

Amazon’s Reliance on Distinguishable Contract Law and Auto-Renewal

Cases Is Misplaced................................................................................................ 18

II.

AMAZON FAILED TO OBTAIN CONSUMERS’ EXPRESS INFORMED

CONSENT TO AUTOMATICALLY-RENEWING PRIME SUBSCRIPTIONS

(COUNTS I, III)................................................................................................................ 22

III.

Amazon Does Not Obtain Consent to Prime’s Material Terms. .......................... 23

Amazon Does Not Tell Consumers the Consequences of Clicking

Its “Enrollment” Buttons........................................................................... 23

Amazon Is Not Permitted to Knowingly Charge Millions of

Nonconsensual Prime Members. .............................................................. 28

Amazon Does Not Obtain Informed Consent. ...................................................... 31

AMAZON DID NOT PROVIDE SIMPLE PRIME CANCELLATION

MECHANISMS (COUNT IV). ........................................................................................ 31

Amazon’s Iliad Cancellation Flow Was Not Simple. ........................................... 32

Amazon Forced Consumers to Find an “End Membership” Button

That Did Not End Membership................................................................. 32

After Entering the Iliad Flow, Consumers Had to Request

Cancellation Three Additional Times. ...................................................... 35

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - i

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 3 of 59

The Iliad Flow Provided Repetitive, Distracting Information and

Options to Derail Consumers’ Cancellation Attempts.............................. 35

Amazon Knew the Iliad Flow Was Not Simple........................................ 36

IV.

THE INDIVIDUAL DEFENDANTS HAD THE AUTHORITY TO CONTROL

OR DIRECTLY PARTICIPATED IN AMAZON’S VIOLATIONS. ............................. 38

VI.

The Complaint More Than Adequately Pleads Grandinetti, Lindsay, and

Ghani’s Liability for Amazon’s Unlawful Cancellation Flow (Count IV). .......... 38

Rule 9(b) Does Not Apply. ....................................................................... 39

Under Any Pleading Standard, the FTC Plausibly Alleges Each

Individual Defendant Had Authority to Control or Directly

Participated in Maintaining the Iliad Flow. .............................................. 40

The Complaint More Than Adequately Pleads Grandinetti’s Liability for

Amazon’s Unlawful Enrollment Practices (Counts I-III). .................................... 42

THE COMPLAINT DOES NOT VIOLATE DEFENDANTS’ DUE PROCESS

RIGHTS. ........................................................................................................................... 43

Defendants’ Vagueness Arguments Fail Because ROSCA and the FTC Act

Are Clear and the FTC Has Not Asserted a “Dark Patterns Theory.” .................. 44

Defendants Had Fair Notice of What ROSCA and the FTC Act Require. ........... 46

The Rule of Lenity Is Inapplicable. ...................................................................... 48

Amazon Redirected Consumers Who Attempted to Cancel by Phone to the

Iliad Flow. ............................................................................................................. 37

DEFENDANTS ARE LIABLE FOR CIVIL PENALTIES BECAUSE THEY

KNEW THEY WERE VIOLATING ROSCA. ................................................................ 49

Defendants Knew of ROSCA’s Existence. ........................................................... 49

The Complaint More Than Plausibly Alleges Defendants’ Actual Knowledge,

or “Knowledge Fairly Implied,” of Their ROSCA Violations. ............................ 50

CONCLUSION ............................................................................................................................. 52

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - ii

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 4 of 59

TABLE OF AUTHORITIES

Cases

Adams v. Amazon.com, Inc., 2023 WL 4002534 (W.D. Va. June 14, 2023) ................................ 28

Applebaum v. Lyft, Inc., 263 F. Supp. 3d 454 (S.D.N.Y. 2017) ................................................... 24

Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................................... 2

Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381 (2nd Cir. 1986) ................................. 6

Barrer v. Chase Bank USA, N.A., 566 F.3d 883 (9th Cir. 2009) .................................................... 3

BBL, Inc. v. City of Angola, 809 F.3d 317 (7th Cir. 2015) ........................................................... 11

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ........................................................................... 2

Berman v. Freedom Fin. Network, LLC, 30 F.4th 849 (9th Cir. 2022) ...................... 14, 15, 23, 24

Bittner v. United States, 598 U.S. 85 (2023) ................................................................................ 49

Butcher v. Knudsen, 38 F.4th 1163 (9th Cir. 2022) ................................................................ 45, 46

Bynum v. U.S. Capitol Police Bd., 93 F. Supp. 2d 50 (D.D.C. 2000)........................................... 45

Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir. 2011) ..................................... 40

Capps v. JPMorgan Chase Bank, N.A., 2023 WL 3030990 (C.D. Cal. Apr. 21, 2023) ............... 19

Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of New York

447 U.S. 557 (1980) .................................................................................................................. 47

Chabolla v. ClassPass Inc., 2023 WL 4544598 (N.D. Cal. June 22, 2023) ......................... 5, 6, 26

City of Almaty v. Khrapunov, 956 F.3d 1129 (9th Cir. 2020)......................................................... 2

Cole v. U.S. Cap., Inc., 389 F.3d 719 (7th Cir. 2004) ............................................................ 14, 15

Cooper v. Anheuser-Busch, LLC, 553 F. Supp. 3d 83 (S.D.N.Y. 2021) ........................................ 4

Cullinane v. Uber Techs., Inc., 893 F.3d 53 (1st Cir. 2018)................................................... 15, 24

Dohrmann v. Intuit, Inc., 823 F. App’x 482 (9th Cir. 2020) ........................................................ 19

Dumont v. Reily Foods Co., 934 F.3d 35 (1st Cir. 2019) ............................................................... 3

Dyson, Inc. v. Garry Vacuum, LLC, 2010 WL 11595882 (C.D. Cal. July 19, 2010) ................... 39

Ekin v. Amazon Servs., LLC, 84 F. Supp. 3d 1172 (W.D. Wash. 2014) ....................................... 28

Elias v. Hewlett-Packard Co., 903 F. Supp. 2d 843 (N.D. Cal. 2012) ........................................... 4

FCC v. Fox Television Stations, Inc., 567 U.S. 239 (2012).................................................... 46, 47

FTC v. Am. Fin. Benefits Ctr., 2018 WL 11354861 (N.D. Cal. Nov. 29, 2018) .......................... 12

FTC v. Am. Fin. Benefits Ctr., 324 F. Supp. 3d 1067 (N.D. Cal. 2018) ................................. 39, 42

FTC v. AMG Servs, Inc., 29 F. Supp. 3d 1338 (D. Nev. 2014) ...................................................... 6

FTC v. Benning, 2010 WL 2605178 (N.D. Cal. June 28, 2010)................................................... 40

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - iii

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 5 of 59

FTC v. Cantkier, 767 F. Supp. 2d 147 (D.D.C. 2011) .................................................................. 39

FTC v. Commerce Planet, Inc., 878 F. Supp. 2d 1048 (C.D. Cal. 2012) ....................................... 6

FTC v. Commerce Planet, Inc., 815 F.3d 593 (9th Cir. 2016) ..................................................... 38

FTC v. Cyberspace.com LLC, 453 F.3d 1196 (9th Cir. 2006) ............................................ 4, 14, 17

FTC v. Dinamica Financiera LLC, 2010 WL 9488821 (C.D. Cal. Aug. 19, 2010) ..................... 40

FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192 (10th Cir. 2005) .............................................. 42

FTC v. Gill, 71 F. Supp. 2d 1030 (C.D. Cal. 1999) ...................................................................... 13

FTC v. Health Formulas, LLC, 2015 WL 2130504 (D. Nev. May 6, 2015) ................................ 31

FTC v. Johnson, 96 F. Supp. 3d 1110 (D. Nev. 2015) ................................................................. 13

FTC v. Loewen, 2013 WL 5816420 (W.D. Wash. Oct., 29, 2013)............................................... 40

FTC v. Publishers Clearing House, 104 F.3d 1168 (9th Cir. 1997) ....................................... 40, 42

FTC v. Quincy Bioscience Holding Co., Inc., 389 F. Supp. 3d 211 (S.D.N.Y. 2019) .................. 42

FTC v. Sterling Drug, Inc., 317 F.2d 669 (2d Cir. 1963) ............................................................... 6

FTC v. Swish Mktg, 2010 WL 653486 (N.D. Cal. Feb. 22, 2010) ................................................ 42

FTC v. World Media Brokers Inc., 2004 WL 432475 (N.D. Ill Mar. 2, 2004)............................. 40

FTC v. Wyndham Worldwide Corp., 799 F.3d 236 (3d Cir. 2015) ............................. 44, 46, 47, 48

Gaker v. Citizens Disability, LLC, --- F. Supp. 3d ----,

2023 WL 1777460 (D. Mass. Feb. 6, 2023) ......................................................................... 5, 14

General Electric Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995) ...................................................... 46

Gershfield v. TeamViewer US, Inc., 2023 WL 334015 (9th Cir. Jan. 20, 2023) .................... 21, 22

Hall v. Time, Inc., 2020 WL 2303088 (C.D. Cal. Mar. 13, 2020) ................................................ 21

Heinz v. Amazon.com, Inc., 2023 WL 4466904 (E.D. Cal. July 11, 2023) .................................. 19

Henry A. v. Willden, 678 F.3d 991 (9th Cir. 2012) ......................................................................... 2

Hooper v. Jerry Ins. Agency. LLC, --- F. Supp. 3d ----,

2023 WL 3992130 (N.D. Cal. June 1, 2023) ............................................................................ 19

In re Grand Jury Matter, 147 F.R.D. 82 (E.D. Pa. 1992)............................................................. 51

In re Kraft, Inc., 114 F.T.C. 40 (1991) ......................................................................................... 30

In re Ring LLC Privacy Litig., 2021 WL 2621197 (C.D. Cal June 24, 2021) .............................. 25

In re Vistaprint Corp. Mktg. & Sales Practices Litig.,

2009 WL 2884727 (S.D. Tex. Aug. 31, 2009) ......................................................................... 11

Karem v. Trump, 960 F.3d 656 (D.C. Cir. 2020) .......................................................................... 47

Kashem v. Barr, 941 F.3d 358 (9th Cir. 2019) ............................................................................. 44

Keebaugh v. Warner Bros. Ent. Inc., 2022 WL 7610032 (C.D. Cal. Oct. 13, 2022) ..................... 5

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - iv

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 6 of 59

Kraft, Inc. v. FTC, 970 F.2d 311 (7th Cir. 1992) .......................................................................... 18

Landers v. Quality Comms., Inc., 771 F.3d 638 (9th Cir. 2014) .................................................... 2

Lee v. Intelius, Inc., 737 F.3d 1254 (9th Cir. 2013) ................................................................ 24, 25

Lopez v. Dave Inc., 2022 WL 17089824 (N.D. Cal. Nov. 21, 2022)..................................... passim

Marsh v. Zaazoom Solutions, LLC, 2012 WL 952226 (N.D. Cal. Mar. 20, 2012) ....................... 31

NetChoice, LLC v. Bonta, 2023 WL 6135551 (N.D. Cal. Sept. 18, 2023) ................................... 47

Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014) ........................................ 6, 14, 23

Nicosia v. Amazon.com, Inc., 384 F. Supp. 3d 254 (E.D.N.Y. 2019)............................................. 4

Oberstein v. Live Nation Ent., Inc., 60 F.4th 505 (9th Cir. 2023) ......................................... passim

Okorocha v. Duff, 596 F. App’x 537 (9th Cir. 2015) ................................................................... 47

Organic Consumers Ass’n v. Sanderson Farms, Inc.,

284 F. Supp. 3d 1005 (N.D. Cal. 2018) ...................................................................................... 4

Orion Ins. Group v. Wash. State Off. of Minority & Women’s Bus. Enters.,

2017 WL 3387344 (W.D. Wash. Aug. 7, 2017) ....................................................................... 44

Perkins v. N.Y. Times Co., 2023 WL 3601489 (S.D.N.Y. May 23, 2023) ................................... 21

Resort Car Rental Sys., Inc. v. FTC, 518 F.2d 962 (9th Cir. 1975) ................................................ 4

Rubio v. Capital One Bank, 613 F.3d 1195 (9th Cir. 2010) ..................................................... 4, 16

Rutter v. Apple Inc., 2022 WL 1443336 (N.D. Cal. May 6, 2022) ............................................... 21

Sadlock v. Walt Disney Co., 2023 WL 4869245 (N.D. Cal. July 31, 2023) ................................... 9

Sellers v. JustAnswer LLC, 289 Cal. Rptr. 3d 1 (Cal. Ct. App. 2021) .................................. 5, 6, 13

Sessions v. Dimaya, 138 S. Ct. 1204 (2018) ................................................................................. 44

Smith v. GlaxoSmithKline Consumer Healthcare Holdings (US) LLC,

--- F. Supp. 3d ----, 2023 WL 2768453 (N.D. Cal. Mar. 9, 2023) ............................................ 39

Snell v. G4S Secure Solutions (USA) Inc., 424 F. Supp. 3d 892 (E.D. Cal. 2019) ....................... 10

Strow v. B&G Foods, Inc., 633 F. Supp. 3d 1090 (N.D. Ill. 2022) ................................................ 3

Sullivan v. All Web Leads, Inc., 2017 WL 2378079 (N.D. Ill. June 1, 2017) ............................... 14

United States v. Mincoff, 574 F.3d 1186 (9th Cir. 2009) .............................................................. 44

United States v. MyLife.com, Inc., 567 F. Supp. 3d 1152 (C.D. Cal. 2021) ........................... 32, 35

United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131 (4th Cir. 1996) ............................................ 49

United States v. Shill, 740 F.3d 1347 (9th Cir. 2014) ................................................................... 48

United States v. Tech. Commc’ns Indus., Inc., 1986 WL 15489 (E.D.N.C. Dec. 22, 1986) ........ 49

United States v. United Healthcare Ins. Co., 848 F.3d 1161 (9th Cir. 2016) ............................... 40

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) ................................................... 39

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - v

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 7 of 59

Viveros v. Audible, Inc., No. 23-cv-0925-JLR, 2023 WL 6960281

(W.D. Wash. Oct. 20, 2023) ..................................................................................................... 22

Walker v. Fred Meyer, Inc., 953 F.3d 1082 (9th Cir. 2020) ........................................................... 3

Walkingeagle v. Google LLC, 2023 WL 3981334 (D. Or. June 12, 2023)....................... 11, 20, 21

Washington v. Internet Order, LLC, 2015 WL 918694 (W.D. Wash. Mar. 2, 2015) ................... 30

William H. Morris Co. v. Group W, Inc., 66 F.3d 255 (9th Cir. 1995) ........................................ 30

Wilson v. Huuuge, Inc., 944 F.3d 1212 (9th Cir. 2019) ................................................................ 15

Statutes

15 U.S.C. § 45(m)(1) ................................................................................................................ 3, 49

15 U.S.C. § 8403(1) ........................................................................................................ 3, 4, 18, 19

15 U.S.C. § 8403(2) .......................................................................................................... 22, 30, 31

15 U.S.C. § 8403(3) ...................................................................................................................... 31

15 U.S.C. § 8404 ........................................................................................................................... 48

Rules

Fed. R. Civ. P. 9(b) ....................................................................................................................... 39

Other Authorities

Dictionary.com, https://www.dictionary.com/browse/simple ...................................................... 31

Speech of Hon. Zachary T. Space of Ohio, 156 Cong. Rec. E2165-02 (Dec. 15, 2010).............. 31

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - vi

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 8 of 59

INTRODUCTION

Millions of consumers who visited Amazon to shop instead found themselves enrolled in

automatically-renewing Amazon Prime subscriptions without their knowledge or consent. That

result was the foreseeable—and widely known within Amazon—consequence of Amazon’s

failure to tell consumers clicking buttons like “Get Free Two-Day Shipping” would enroll them

in a Prime free trial and that the trial would automatically convert to a paying membership.

When these and other consumers attempted to cancel their Prime subscriptions through the aptly

named “Iliad” cancellation flow, Amazon first forced them to locate an “end membership”

button that did not end membership. Consumers then had to navigate additional screens that did

not allow them to cancel and instead made repeated retention offers. Far from being simple, this

process resulted in millions of Prime members continuing to be charged for memberships they

thought they had cancelled.

Amazon’s failures to provide clear enrollment processes and simple cancellation

mechanisms are apparent from the screenshots attached to and described in the FTC’s

Complaint, notwithstanding Amazon’s contextless, false, and misleading descriptions. The

Court, however, need not decide that issue at this stage. Rather, Amazon’s motion must fail if it

is plausible the FTC is right—i.e., if it is plausible that (1) ordinary consumers did not

understand they were enrolling in automatically-renewing Amazon Prime subscriptions while

trying to buy products (Counts I-III) and (2) Amazon’s cancellation process was not simple

(Count IV). Although the Court could easily draw that inference from the face of the enrollment

and cancellation flows themselves, the Complaint also discusses copious evidence—drawn from

Amazon’s own documents and data—supporting these allegations and the Individual

Defendants’ liability for them.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 1

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 9 of 59

LEGAL STANDARD

On a Rule 12(b)(6) motion to dismiss, the Court must “accept as true all well pleaded

facts in the complaint and construe them in the light most favorable” to the plaintiff. Henry A. v.

Willden, 678 F.3d 991, 998 (9th Cir. 2012) (cleaned up). A Complaint survives a motion to

dismiss when it “state[s] a claim for relief that is plausible on its face.” Landers v. Quality

Comms., Inc., 771 F.3d 638, 641 (9th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.

544, 570 (2007)). A complaint is “plausible” when it “allows the court to draw the reasonable

inference” of liability. Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Therefore,

dismissal is inappropriate unless it “appears beyond doubt that plaintiff can prove no set of facts

in support of its claims which would entitle it to relief.” City of Almaty v. Khrapunov, 956 F.3d

1129, 1131 (9th Cir. 2020) (cleaned up). Here, there is no question the FTC’s Complaint meets

and, in fact, far surpasses this standard.

ARGUMENT

Amazon’s motion fails on all counts. First, the Complaint provides convincing evidence

that Amazon did not clearly and conspicuously disclose Prime’s auto-renewal and price—or, in

many cases, the fact that consumers were enrolling in Prime at all—prior to obtaining

consumers’ billing information and enrolling them in Prime. Second, the facts detailed in the

Complaint more than demonstrate Prime enrollees frequently did not consent at all to becoming

Prime members or to Prime’s auto-renewal and price, and certainly did not provide express

informed consent. Third, the Complaint pleads facts demonstrating Amazon’s cancellation

process was not simple.

The Individual Defendants’ motion fares no better because the Complaint plausibly

alleges, at a minimum, that each Individual Defendant had the authority to correct Amazon’s

unlawful conduct but declined to do so. Additionally, Defendants’ due process argument fails

for the straightforward reason that no Defendant actually asserts the relevant statutes are

unconstitutionally vague. Finally, Defendants cannot escape the prospect of civil penalties

because the FTC more than plausibly alleges each Defendant knew ROSCA existed and knew, or

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 2

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 10 of 59

had knowledge “fairly implied on the basis of objective circumstances” (15 U.S.C. § 45(m)(1)),

that their actions violated ROSCA.

AMAZON FAILED TO CLEARLY AND CONSPICUOUSLY DISCLOSE

PRIME’S MATERIAL TERMS (COUNT II).

The Restore Online Shoppers’ Confidence Act (“ROSCA”), 15 U.S.C. § 8403(1),

requires Amazon to “clearly and conspicuously disclose[] all material terms” of Prime before

obtaining consumers’ billing information. “Clear” means “reasonably understandable,” and

“conspicuous” means “readily noticeable to the consumer.” Walker v. Fred Meyer, Inc., 953

F.3d 1082, 1091 (9th Cir. 2020) (quotation marks omitted) (defining “clear and conspicuous”

under Fair Credit Reporting Act). A “clear and conspicuous” disclosure, therefore, is one that a

“reasonable [consumer] would notice and understand.” Barrer v. Chase Bank USA, N.A., 566

F.3d 883, 892 (9th Cir. 2009) (defining “clear and conspicuous” under Truth in Lending Act);

see also Mot.1 at 7 (Amazon approvingly citing FTC statement that disclosures are clear and

conspicuous if they are “easily noticeable and understood by ‘ordinary consumers’” (emphasis

added)). The “reasonable consumer” is not an “erudite reader” inclined to carefully parse a

website “like a federal judge reading a statute.” Dumont v. Reily Foods Co., 934 F.3d 35, 40 (1st

Cir. 2019); see also Strow v. B&G Foods, Inc., 633 F. Supp. 3d 1090, 1102 (N.D. Ill. 2022)

(“Again, consumers are not judges. This Court will not impose on average consumers an

obligation to question the labels they see and parse them as lawyers might for ambiguities . . . .”

(quotation marks omitted)). Rather, the reasonable consumer is “an ordinary consumer acting

reasonably under the circumstances . . . who is not versed in the art of inspecting and judging a

Citations to the “Motion” refer to Amazon’s Motion to Dismiss, filed under seal at Dkt. #85 and in redacted form

at Dkt. #84. Citations to the “Individuals’ Motion” refer to Defendants Neil Lindsay, Russell Grandinetti, and Jamil

Ghani’s Motion to Dismiss (Dkt. #83). Page number citations refer to the numbering in the footer of each motion,

rather than the numbering in the ECF header at the top of the page.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 3

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 11 of 59

product.” Elias v. Hewlett-Packard Co., 903 F. Supp. 2d 843, 854 (N.D. Cal. 2012) (cleaned

up).2

Because ROSCA is a consumer protection statute, “any misleading ambiguity [in

defendants’ disclosures] . . . should be resolved in favor of the consumer.” Rubio v. Capital One

Bank, 613 F.3d 1195, 1200 (9th Cir. 2010) (cleaned up) (applying principle to Truth in Lending

Act); see also Resort Car Rental Sys., Inc. v. FTC, 518 F.2d 962, 964 (9th Cir. 1975)

(“Advertising capable of being interpreted in a misleading way should be construed against the

advertiser.”). This is particularly true at the motion to dismiss stage: “courts grant motions to

dismiss under the reasonable consumer test only in rare situations in which the facts alleged in

the complaint compel the conclusion as a matter of law that consumers are not likely to be

deceived.” Organic Consumers Ass’n v. Sanderson Farms, Inc., 284 F. Supp. 3d 1005, 1014

(N.D. Cal. 2018) (quotation marks omitted); see also Cooper v. Anheuser-Busch, LLC, 553 F.

Supp. 3d 83, 96 (S.D.N.Y. 2021) (inappropriate to dismiss claims about reasonable consumer

that do not “border on fantasy” or are not “patently implausible”).

The FTC’s Complaint more than plausibly alleges ordinary consumers would not readily

notice and understand three material terms of the Prime enrollment transaction: (1) that they are

enrolling in Prime, (2) that their Prime membership automatically renews, and (3) Prime’s

monthly cost.3 The Complaint easily clears this low bar in several ways. First, although wholly

ignored by Amazon, the context in which Amazon enrolls consumers in Prime and “discloses”

Prime’s terms—as part of the product-checkout process—makes it unlikely consumers would

Amazon misleadingly cites an Eastern District of New York case for the notion that “ordinary internet users . . .

‘know there are terms and conditions attached when they . . . order merchandise on Amazon . . . because it would be

difficult to exist in our technological society without some generalized awareness of the fact.’” Mot. at 7-8 (quoting

Nicosia v. Amazon.com, Inc., 384 F. Supp. 3d 254, 278 (E.D.N.Y. 2019), aff’d, 815 F. App’x 612 (2d Cir. 2020)).

Amazon fails to tell the Court that this quote is from a discussion of what that court thought the law ought to be, not

what the law actually is. Nicosia, 384 F. Supp. 3d at 278-79.

Amazon does not dispute that these terms are “material” and that ROSCA therefore required Amazon to “clearly

and conspicuously disclose[]” them. 15 U.S.C. § 8403(1); see also FTC v. Cyberspace.com LLC, 453 F.3d 1196,

1201 (9th Cir. 2006) (information is “material” if it is “important to consumers and, hence, likely to affect their

choice of, or conduct regarding, a product” (quotation marks omitted)).

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 4

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 12 of 59

look for, find, and understand the relevance of those terms. Second, Amazon’s disclosures are

generally small print, below (sometimes far below) the relevant enrollment button, and

overshadowed by the page’s marketing text and graphics. Third, Amazon, based on actual data

from studying consumers, drew the same inference it now says is implausible—that many

consumers did not notice and understand Prime’s disclosures of material terms. Fourth,

regardless of whether consumers would see or understand the disclosures, Amazon violated

ROSCA by only displaying them after obtaining consumers’ billing information. Finally, the

caselaw cited by Amazon does not allow it to escape liability for the reasons detailed below.

The Context Within Which Amazon Displays Prime’s Material Terms Makes

It Unlikely Consumers Will Notice Them.

When evaluating the conspicuousness of online disclosures, “the full context of the

transaction is critical.” Chabolla v. ClassPass Inc., 2023 WL 4544598, at *5 (N.D. Cal. June 22,

2023) (emphasis original; quotation marks omitted); see also Gaker v. Citizens Disability, LLC,

--- F. Supp. 3d ----, 2023 WL 1777460, at *6 (D. Mass. Feb. 6, 2023) (applying “totality of the

circumstances inquiry” to determine whether terms were “clear and conspicuous”). Although

some courts “have focused on factors such as font size and graphic layout to determine whether a

user would be on inquiry notice that he was consenting to an agreement,” focusing on these

considerations alone can lead to “inconsistent decisions.” Keebaugh v. Warner Bros. Ent. Inc.,

2022 WL 7610032, at *6 (C.D. Cal. Oct. 13, 2022) (cleaned up) (citing Sellers v. JustAnswer

LLC, 289 Cal. Rptr. 3d 1, 26 (Cal. Ct. App. 2021)). Instead, courts properly examine “the full

context of the transaction . . . to determin[e] whether a given textual notice is sufficient to put an

internet consumer on inquiry notice of contractual terms.” Keebaugh, 2022 WL 7610032, at *6

(quoting Sellers, 289 Cal. Rptr. 3d at 26); see also id. (criticizing the parties for only addressing

the “visual elements” of the webpage to the exclusion of the remaining “context of the

transaction”).

The Ninth Circuit endorsed this contextual approach in a case heavily relied upon by

Amazon. See Oberstein v. Live Nation Ent., Inc., 60 F.4th 505, 516-17 (9th Cir. 2023); see also

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 5

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 13 of 59

Chabolla, 2023 WL 4544598, at *6 (explaining that Ninth Circuit in Oberstein “opted to apply

the [contextual] approach, rather than discredit it”). In Oberstein, the Ninth Circuit explained

that a user who “contemplates some sort of continuing relationship” with an entity is more likely

to “scrutinize the [website] for small text” than a user “merely attempting to start a free trial.”

Oberstein, 60 F.4th 505 at 516-17 (9th Cir. 2023) (quoting and discussing, with approval,

Sellers, 289 Cal. Rptr. 3d at 24); see also Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1177

(9th Cir. 2014) (“[C]onsumers cannot be expected to ferret out hyperlinks to terms and

conditions to which they have no reason to suspect they will be bound . . . .”).

Similarly, in FTC Act cases, courts “consider the advertisement in its entirety [rather

than] engag[ing] in disputatious dissections. The entire mosaic should be viewed rather than

each tile separately.” Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381, 385 (2nd Cir.

1986) (quoting FTC v. Sterling Drug, Inc., 317 F.2d 669, 674 (2d Cir. 1963)). Therefore, when

considering how the ordinary consumer would interpret a website or other marketing materials,

courts consider the overall “net impression” left by the website. See, e.g., FTC v. Commerce

Planet, Inc., 878 F. Supp. 2d 1048, 1063 (C.D. Cal. 2012), aff’d in part, vacated in part on other

grounds, 815 F.3d 593 (9th Cir. 2016); see also FTC v. AMG Servs., Inc., 29 F. Supp. 3d 1338,

1350-51 (D. Nev. 2014) (“The Loan Note and Disclosure document’s net impression is likely to

mislead because of the way the terms are presented . . . , not because Defendants’ counsel can

pull out the important terms and rearrange them in large bullet point lists that allow for a clearer

understanding of their effects.”), reversed on other grounds, 141 S. Ct. 1341 (2021).

Here, the relevant context—primarily, Amazon’s strategy of embedding its Universal

Prime Decision Page (“UPDP”) and Single Page Checkout (“SPC”) Prime enrollment pages

within the product checkout process—made it unlikely many ordinary consumers would notice

Amazon had enrolled them in a Prime free trial or that the Prime free trial automatically

converted to a paid membership after 30 days.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 6

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 14 of 59

Amazon Gives Consumers No Reason to Look for, or Notice, Its

Small-Print UPDP Disclosures.

A shopper attempting to purchase items on Amazon typically places those items in their

shopping cart, and then proceeds through four screens by clicking a large orange button on each

screen to move to the next screen. Compl. ,i,i 34-35, Att. G at 1-5.4 After those four screens, the

product purchaser encounters the UPDP (Compl. Att. G at 6), examples of which are shown in

Figure 1 (desktop) and Figure 2 (mobile) below:

.Show ...... lC[

amaion.com

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Trial of Prime.

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Figure 1 (Desktop UPDP; Comp/. A tt. BJ

All citations to the "Complaint" refer to the FfC's Amended Complaint, filed under seal at Dkt. #69 and in

redacted fo1m at Dkt. #67.

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 7

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 15 of 59

---·-

amazon

QgescpqHnb, we are giving you a 30-day

free trial of Amazon Prime. Save S5.99

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order.

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for FREE Two-O,y Shipping

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free tr-.JL Your Am•zon Prime mtmbenhip continues

until can<elled. If you do not wish 10 continue for

S12.99/month pluuny appliublt tut1- you may

anc:t.l anytime by vi.siting Your Account and adjusting

your mtmbtrshlp Ht tings..

Figure 2 (Mobile UPDP; Comp/. Att. M)

Generally, the UPDP page header does not tell consumers they have a choice to accept or

reject a Prime free trial. Instead, in many cases, as in Figures 1 and 2, Amazon simply declares

"we're giving you a 30-day FREE Trial of Prime"- ti·eating the trial as an automatic add-on to

the consumer 's product purchase. See also Compl. Att. E, G at 6, Lat 7, M, 0 at 5. That

impression is bolstered by Amazon 's telling consumers what "Your Prime benefits include"

(Figure 1), in present tense, again implying the consumer need not do anything else to receive the

benefits. See also Compl. Att. G at 6. Amazon makes the problem worse by providing a single

large orange button on the page, which the shopper might reasonably think is their only option

for proceeding with their product purchase. Compl. ~ 39. Beyond that, the single large orange

button often reads, as in Figures 1 and 2, "Get FREE Two-Day Delive1y" or similar language,

again implying the button relates only to the shopper's product purchase. See also Compl. Att.

A. Counterintuitively, clicking the "delive1y" button actually emolls the consumer in Prime,

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 8

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 16 of 59

even if the consumer does not finish the product purchase.5 Compl. ¶ 40. (Unbeknownst to

many consumers, the small blue link to the left of or below the orange button—which sometimes

says “No thanks” or states that the consumer will continue without “fast, FREE delivery”—

permits the consumer to finish their product purchase without enrolling in Prime. See Id. ¶¶ 41,

42, 44, 207 (consumers overlook “no thanks” link), 231(c)(i), (d)(ii) (same).)

The UPDP page therefore does not make clear the consumer is making any decision,

much less a decision to enter a “continuing relationship” with Amazon. Oberstein, 60 F.4th at

516-17. Consumers merely trying to finish their product purchase would have no reason to read,

notice, or even look for the small print Prime terms at the bottom of the page. But Prime’s

material terms—its auto-renewal, price, and sometimes even the fact that the consumer is

enrolling in Prime—generally are only disclosed in this small-print boilerplate. Although

Amazon now claims that none of this is even plausibly true, Amazon has known since at least

2018 that “customers did not realize [UPDP] was a Prime upsell.” Compl. ¶ 195.

Even UPDP versions on which the orange button reads “Start my 30-day FREE trial” (as

in Figure 3 below) or “Start Your 30-day Prime FREE trial” (Compl. Att. C) still give consumers

no reason to search out any terms—or “scrutinize the page for small text,” Oberstein, 60 F.4th at

516-17—because there is no indication anywhere on the button, or in the page’s header or

marketing content, that there are any such terms. See, e.g., Sadlock v. Walt Disney Co., 2023

WL 4869245, at *11 (N.D. Cal. July 31, 2023) (“[Plaintiff] undoubtedly knew that he was

purchasing a subscription with Disney, but that—by itself—does not mean he should have

known there was a Subscription Agreement to which he would be bound.”).

In some UPDP versions—such as Figure 1, but not Figure 2—a gray “shadow button” beneath the “delivery”

button reads “Enjoy Prime FREE for 30 days” or something similar. See also Compl. Atts. A, E, I at 3. Consumers

are just as, if not more, likely to interpret that button as an alternative to the orange “Free Delivery” button as they

are to read it as somehow clarifying what “Free Delivery” means. See, e.g., Compl. ¶ 220 (Amazon considered

“remov[ing] shadow boxes around buttons” to improve clarity).

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 9

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 17 of 59

amazon.com

Test, we're giving you a 30-day FREE trial of Prime

prime

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FREEdeiYe<Yon~elogtle_,

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on Mc after JiCl'.lf 30-day he_,.. You, Am.non Prime ~ p aorcir,,un w,lbl ~ e d . Hyou do not wi~h tlO oanti,.,. fM 112.tthnonth put...,., ~ h i e tans. you nuy oanotf

anydme by vtsldng Y0411' Accoutt • nd •dfu.sdng your membersHp uctlngs. ForaJ5tornel'$ n Harrit,a, Pueno Rico and JJaska p~ase WSI" fle knNon Prmt' ~ 8Mtfts ~ to check

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Figure 3 (Desktop UPDP; Comp/. Att. D)

That is paiiicularly tme here because some ordinaiy Amazon shoppers do not realize they have

any alternative but to click the orange button if they want to finish their product purchase.

Again, Amazon now claims this confusion is implausible, but the company previously

recognized "the option to decline Prime enrollment ' is not cleai-/prominent so customers miss it'

and click on the enrollment [button] inadve1iently." Compl. ,r 195.

Additionally, Amazon claims that on some of its UPDP pages (such as Figure 3 above),

Prime's price and auto-renewal te1ms ai·e displayed twice-or, as Amazon says, "multiple"

times. Mot. at 11 . That ai·gument, however, is based on the false premise that the following text

is a disclosure that Prime auto-renews: "After your FREE trial, Prime is just $12.99/month."

The quoted language discloses only price, not auto-renewal, at the end of the free trial. 6 At the

ve1y least, it is more than plausible consumers would not understand they will be charged $12.99

per month if they do nothing but accept a "FREE trial." In any event, Amazon cannot prevail on

its motion to dismiss by claiming that some of its enrollment pages ai·e good enough. See Snell v.

6 Confusingly, Amazon also inflates the number of Complaint attachments that have a second price disclosure by

citing three examples (Compl. Atts. A-C) that contain just a single disclosure, in small print. Mot. at 11.

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 10

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 18 of 59

G4S Secure Solutions (USA) Inc., 424 F. Supp. 3d 892, 904 (E.D. Cal. 2019) (“A motion to

dismiss under Rule 12(b)(6) doesn’t permit piecemeal dismissals of parts of claims; the question

at this stage is simply whether the complaint includes factual allegations that state a plausible

claim for relief.”) (quoting BBL, Inc. v. City of Angola, 809 F.3d 317, 325 (7th Cir. 2015)).

Amazon’s “SPC” Page Hides Prime’s Material Terms Until After

Consumers Agree to “Try Prime.”

Amazon showed consumers who managed to click through the UPDP without enrolling

in Prime another Prime upsell on the SPC “checkout” page. This page fails to display Prime’s

terms until after the consumer might have looked for them. Specifically, as pictured below in

Figure 4, Amazon encouraged consumers to click a button to “Try Prime FREE for 30 days.” At

the time consumers clicked that button, Amazon did not disclose anywhere on the page that

Prime auto-renews or its price.7 Compl. ¶ 58. Instead, Amazon called Prime “FREE” four

separate times and claimed the free trial comes with “no commitments.” Therefore, Amazon’s

assertion that each enrollment page “discloses the price and auto-renewal features on the same

page where users click to enroll in Prime,” Mot. at 8, is simply false.8 In fact, as the Complaint

alleges (id. ¶¶ 56-58), when the consumer decides to enroll in Prime, Amazon fails to disclose

Prime’s terms at all, much less to do so clearly and conspicuously.

The same is true for Amazon’s “Ship Option Select Page” (“SOSP”). See Compl. Att. G at 4. That page allows

consumers to select a “FREE trial of Prime” without any disclosure of Prime’s auto-renewal or price.

Amazon is also incorrect that any same-page disclosure of material terms qualifies as clear and conspicuous. Mot.

at 8. The two cases cited by Amazon do not support its claim. See In re Vistaprint Corp. Mktg. & Sales Practices

Litig., 2009 WL 2884727, at *4 (S.D. Tex. Aug. 31, 2009) (finding website nondeceptive where, unlike here,

disclosures were referenced above where consumer provided consent and disclosures themselves were “immediately

beside” where consumer provided consent and disclosures were “in the same size and color as most of the print on

the webpage”); Walkingeagle v. Google LLC, 2023 WL 3981334, at *3-4 (D. Or. June 12, 2023) (finding autorenewal disclosures clear and conspicuous where, unlike here, they were directly above the enrollment button, with

minimal surrounding text, and accompanied by a second disclosure, also above the enrollment button, of “monthly

charge” and billing start date).

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 11

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 19 of 59

a.!!!!!on.corn

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Figure 4 (Desktop SPC Before Clicking "T1y Prime FREE"; Comp/. Att. Hat 5)

Only after consumers click the button to enroll in Prime does Amazon disclose, in the

third block of text under the "Place your order" button (as shown in Figure 5 below), that Prime

automatically renews, for $12.99 per month, after the free trial.9 At that point, however, it is at

least plausible-and in fact highly likely- an ordinaiy consumer would assume they had ah-eady

signed up for free Prime and, when clicking "Place your order," were merely purchasing the

product they wanted. Such a user is unlikely to "scrntinize the page for small text" or hidden

tenns, especially tenns related to Prime rather than their product purchase. Oberstein, 60 F.4th

at 516-17; see also FTC v. Am. Fin. Benefits Ctr., 2018 WL 11354861 , at *9 (N.D. Cal. Nov. 29,

2018) (misrepresentations not cured by disclosure after consumer "agreed to enroll," even

9 This same pattem--clicking a button to enroll in Prime followed by an after-the-fact disclosure--occurs on

Amazon's recently created "TmeSPC" checkout page. Compl. Att. I at 4-5.

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 12

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 20 of 59

though contrnct had not yet been finalized); FTC v. Gill, 71 F. Supp. 2d 1030, 1044 (C.D. Cal.

1999) (rejecting relevance of disclaimer "found on the contract that consumers eventually sign

with the defendant"); FTC v. Johnson , 96 F. Supp. 3d 1110, 1139 (D. Nev. 2015) ("fine-print

disclosm es" after consumers began ordering process did not overcome misleading net

impression). After all, a "consumer that does not expect to be bound by contractual tenns is less

likely to be looking for them." Sellers, 289 Cal Rptr. 3d at 25 (explaining that consumer buying

"a single pair of socks" likely would not "expect to be bound by contractual te1ms").

amazon.com

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Figure 5 (Desktop SPC After Clicki.ng "T,y Prime FREE"; Comp!. Aft. Hat 6)

Even Ignoring Context, Amazon's Disclosures of Material Terms Are Not

Clear and Conspicuous.

Amazon fatally ignores the context, and some of the facts, described above, instead

focusing exclusively on font sizes, styles, colors, and proximity to enrollment buttons. Mot. at

8-12. Even viewing the Complaint through Amazon's selectively nanow lens, the FTC more

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 13

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 21 of 59

than plausibly alleges many ordinary customers would neither see nor understand Prime’s price

and auto-renewal terms or, in some cases, that they are enrolling in Prime at all. Contrary to

Amazon’s assertions, those terms are presented in small print, below (sometimes far below) the

enrollment button, often starting on the opposite side of the page as the button, and

overshadowed by marketing text and graphics on the page, which are missing from Amazon’s

cropped screenshots. Therefore, the terms are not clearly and conspicuously disclosed.

“Website users are entitled to assume that important provisions—such as those that

disclose the existence of proposed contractual terms—will be prominently displayed, not buried

in fine print.” Berman v. Freedom Fin. Network, LLC, 30 F.4th 849, 857 (9th Cir. 2022). As

such, courts routinely find fine print terms and conditions like Amazon’s inconspicuous. See,

e.g., Cyberspace.com, 453 F.3d at 1198 (FTC Act case; “small-print disclosures” on back of

printed material were insufficient to put consumers on notice they were “agree[ing] to pay a

monthly fee”); Cole v. U.S. Cap., Inc., 389 F.3d 719, 731 (7th Cir. 2004) (Fair Credit Reporting

Act case; text not clear and conspicuous where “disproportionately small compared to the

surrounding text” and “appears to be designed to ensure minimal attention by the reader”); Lopez

v. Dave Inc., 2022 WL 17089824, at *1 (N.D. Cal. Nov. 21, 2022) (contract case; text not

“reasonably conspicuous” when “printed in a tiny gray font considerably smaller than the font

used in the surrounding website elements”).

Additionally, even under the laxer standards for conspicuousness applicable in contract

law as opposed to ROSCA (see infra Section I.E), courts are critical of, and often deem

inconspicuous, disclosures located below the enrollment button to which they apply. See, e.g.,

Nguyen, 763 F.3d at 1178 (contract case; finding lack of “reasonable notice” of contract terms

even where “Terms of Use” link appeared “directly below” the relevant button); Gaker, 2023

WL 1777460, at *6 (contract case; recognizing general rule that “a consumer is less likely to be

bound to terms agreed to on the internet where the terms were located below the ‘accept’ or

‘submit’ button or were otherwise hidden or difficult to access”) (citing Sullivan v. All Web

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 14

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 22 of 59

Leads, Inc., 2017 WL 2378079, at *7 (N.D. Ill. June 1, 2017)); Lopez, 2022 WL 17089824, at *2

(contract case; refusing to find a hyperlink conspicuous where it was “below the ‘Join’ button,

meaning a user could enter their mobile number and click ‘Join’ without reviewing the remainder

of the page”).

Even text immediately above an enrollment button may be deemed inconspicuous,

especially where “other visual elements . . . draw the user’s attention away.” Berman, 30 F.4th

at 856-57. More generally, disclosures are not conspicuous if consumers must “parse through

confusing or distracting content and advertisements” to see them. Wilson v. Huuuge, Inc., 944

F.3d 1212, 1221 (9th Cir. 2019). “If everything on the screen is written with conspicuous

features, then nothing is conspicuous.” Cullinane v. Uber Techs., Inc., 893 F.3d 53, 64 (1st Cir.

2018).

Here, Amazon’s disclosures of Prime’s material terms are generally below (sometimes

far below) the enrollment buttons on both UPDP and SPC, if they are there at all. See Figures 15; Compl. Atts. A-D, F, G at 6, H at 5-6, J at 6, K at 4, L at 7, M, O at 5. On desktop versions of

UPDP, the disclosures start on the far-left side of the page, while the orange enrollment button is

on the right. See, e.g., Figure 1; Compl. Atts. A-D, F, G at 6, H at 5-6. On mobile versions of

UPDP, the disclosures are sometimes not even visible without scrolling down past the button.

Compl. ¶¶ 83, 96, 100, 102; Compl. Atts. L at 7, O at 5.10 On both versions, the UPDP

disclosures are generally far from the page’s more prominent marketing text and graphics, again

in plain, small print. See Figures 1-5; Compl. Atts. A-D, G at 6, L at 7, M, O at 5.

Similarly, the SPC auto-renewal and price disclosures (see Figure 5 above) are the type

of fine print disclosures courts routinely reject. See, e.g., Cole, 389 F.3d at 731. The SPC

disclosures are in the middle of the third block of text below the “Place your order” button, after

Amazon claims it must require scrolling on mobile devices because it would otherwise by required to pack

“miniscule text” into a “few square inches.” Mot. at 12 n.6. Even a cursory look at Amazon’s mobile UPDP pages,

however, reveals the actual problem: Amazon has used almost the entire screen for marketing rather than displaying

Prime’s material terms. See Compl. Atts. L at 7, O at 5.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 15

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 23 of 59

statements about Amazon's "privacy notice," unrelated "conditions of use," and other "tenns."

See Figure 5; Compl. Att. H at 6. In that third block of text, Amazon references other

unspecified "Tenns and Conditions" and then, in bold text in the middle of the paragraph,

mentions "Prime" for the first time and discloses auto-renewal and price. Id. Therefore, the user

could easily click "Place your order" without ever seeing this text.

Thus, Amazon is simply inconect when it claims Prime's price and auto-renewal te1ms

are located "directly on top of or below each enrollment button." Mot. at 9 (cleaned up). In fact,

the disclosures are only ve1y rarely either above the enrollment button or directly below it.

Amazon Knows, Based on Evidence from Its Own Customers, That

Ordinary Shoppers Do Not See Prime's Material Terms.

For the foregoing reasons, Amazon's arguments regarding clarity and conspicuousness

should be rejected without looking beyond Amazon's enrollment pages theinselves. That,

however, does not mean, as Amazon suggests, the Comt must ignore all evidence in the

Complaint demonstrating ordinaiy consumers' actual experiences with Prime enrollment. As the

Ninth Circuit explained, such "empirical evidence is helpful in dete1mining what a reasonable

consumer will understand and readily notice." Rubio, 613 F.3d at 1200. Therefore, where

"persuasive and directly relevant evidence is available," the paities' "an nchair empiricism is

compai·atively unhelpful." Id.

Here, the Complaint alleges Amazon possessed, reviewed, and relied upon exactly the

type of"persuasive and directly relevant evidence" embraced by the Ninth Circuit-namely, user

studies and other data showing that consumers did not see or understand Prime's material te1ms.

For example:

•

From November 2018 to Febrnaiy 2019, Amazon dete1mined that roughly

of Prime members who cancelled their subscriptions gave, "I did not mean

to sign up for Amazon Prime" as their reason for cancellation. Comp1. ,i 177.

11 The FTC has redacted the public version of this Opposition consistent with the Cowt 's rnling on Amazon's

requests to seal the Complaint and Amended Complaint. Dkt. #79. The FTC has concwTently filed an unredacted,

sealed version of the Opposition.

PLAINTIFF' S OPPOSITION TO

Federal Trade Commission

DEFENDANTS' MOTIONS TO DISMISS

600 Pennsylvania Avenue NW

Washington, DC 20580

Case No. 2:23-cv-0932-JHC - 16

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 24 of 59



A company newsletter called the “issue of accidental Prime-sign ups” “well

documented,” explaining that Amazon shoppers either “signed up accidentally

and/or didn’t see auto-renewal terms.” Compl. ¶ 179.



Compl. ¶ 231(d)(ii).



Compl. ¶ 193.

A memorandum prepared for a June 2019 meeting with Defendant Grandinetti

explained that the product checkout Prime enrollment pages (i.e., UPDP and SPC)

confused consumers about whether they were enrolling and made it difficult for

them to understand Prime’s price and auto-renew feature. Compl. ¶ 205.



changes to Prime were near the “minimum bar” of clarity improvements but

Defendant Ghani wrote to Defendant Lindsay that certain September 2020

“nevertheless had a significant negative impact” on enrollment. Compl. ¶ 220.



Amazon estimated in September 2020 that

Prime members were

unaware they were enrolled in Prime. (This fact is discussed in greater detail,

infra Section II.A.2.) Compl. ¶ 178. As part of making that estimate, Amazon

considered

Id.

Amazon’s contention that these facts are “categorically irrelevant” or “subjective” (Mot.

at 12-13) is unusual and unsupported. Even under an objective test, evidence does not become

irrelevant merely because it is based on actual people’s experiences rather than argument of

counsel. Just the opposite—while extrinsic evidence of actual deception is not required under

the FTC Act or ROSCA, it can be “highly probative” when available. Cyberspace.com, 453 F.3d

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 17

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 25 of 59

at 1201. Indeed, in the Lanham Act context, courts applying an objective reasonable consumer

test “generally require extrinsic evidence” regarding how consumers interpret “deceptive

advertising.” Kraft, Inc. v. FTC, 970 F.2d 311, 319 (7th Cir. 1992) (emphasis added). The law

therefore does not support Amazon’s position that actual consumers’ experiences are irrelevant.

Amazon Impermissibly Discloses Prime’s Terms and Conditions After

Obtaining Billing Information.

ROSCA unambiguously requires Amazon to disclose Prime’s material terms “before

obtaining the consumer’s billing information.” 15 U.S.C. § 8403(1) (emphasis added). This

requirement is important because consumers are more likely to understand the purpose for which

they are providing their billing information if the merchant first tells them what the information

is being used for. Yet Amazon blatantly violates this statutory requirement. In particular,

Amazon collects consumers’ billing information in connection with the consumers’ product

purchase, before making the UPDP and SPC Prime upsells. Amazon then uses that billing

information to charge consumers who later enroll, whether consensually or not, in Prime. See,

e.g., Compl. Att. G at 5 (Amazon obtains billing information), 6 (Amazon makes inconspicuous

disclosure); Compl. Att. N at 6 (Amazon obtains billing information), 8 (Amazon makes

inconspicuous disclosure). This is particularly problematic when consumers are enrolled in

Prime and then abandon their shopping cart (Compl. ¶¶ 40, 84), and therefore never complete the

original transaction for which they provided the billing information.

Amazon’s Reliance on Distinguishable Contract Law and Auto-Renewal

Cases Is Misplaced.

The cases cited by Amazon cannot erase their violations. Those cases generally either

(1) interpret contract law, which imposes a less stringent conspicuous-disclosure standard than

ROSCA (and which Amazon would still struggle to satisfy in any event), or (2) are auto-renewal

cases involving far different facts.

Contract law. Many of Amazon’s cases relate to the enforceability of forum-selection or

arbitration clauses found in website terms and conditions. In that context, courts will find an

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 18

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 26 of 59

enforceable contract where, inter alia, a website “provides reasonably conspicuously notice”—

often in the form of a hyperlink— “of the terms to which the consumer will be bound.”

Oberstein, 60 F.4th at 515 (emphasis added); see also Dohrmann v. Intuit, Inc., 823 F. App’x

482, 483 (9th Cir. 2020) (examining “whether a hyperlink to a website’s terms of use [was]

sufficiently conspicuous” (emphasis added)). That rule is based on the fact that a contract is

enforceable if the website puts a reasonable consumer on “inquiry notice of the agreement’s

existence and contents.” Dohrmann, 823 F. App’x at 483 (cleaned up). This standard—whether

a hyperlink is sufficiently conspicuous to put consumers on inquiry notice of a contract’s

contents—is far less demanding than ROSCA’s requirement of clear and conspicuous disclosure

of an agreement’s actual terms. See 15 U.S.C. § 8403(1) (requiring “text”—not hyperlink to

text—that “clearly and conspicuously discloses all materials terms of the transaction”).12

Beyond that, Amazon likely cannot even clear the relatively low contract-law bar, much

less the heightened ROSCA bar, because the contract cases Amazon cites all involved more

conspicuous disclosures than Amazon’s enrollment pages. See, e.g., Oberstein, 60 F.4th at 51617 (link to disclosures was “distinguished from the rest of the text,” “not buried on the bottom of

the webpage or placed outside the action box,” and was “located directly on top of or below each

action button” (emphasis added)); Dohrmann, 823 F. App’x at 484 (disclosure was “directly

under” the button and was the only emphasized text on the “relatively uncluttered” page); Heinz

v. Amazon.com, Inc., 2023 WL 4466904, at *1-2 (E.D. Cal. July 11, 2023) (hyperlink to Terms

and Conditions was “directly below” button and thus “sufficiently conspicuous” to enforce

forum selection clause therein); Capps v. JPMorgan Chase Bank, N.A., 2023 WL 3030990, at *4

(C.D. Cal. Apr. 21, 2023) (relevant disclosure was “in bolded text immediately above” the

button); Hooper v. Jerry Ins. Agency. LLC, --- F. Supp. 3d ----, 2023 WL 3992130, at *3 (N.D.

Amazon’s argument that its hyperlinks to Prime’s terms and conditions are sufficient, standing alone, to satisfy

ROSCA (Mot. at 11) fails for two additional reasons. First, Amazon never tells the Court what information it shows

to a user who clicks the hyperlinks. Second, Amazon’s hyperlinks are themselves inconspicuously buried in smallprint disclosures.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 19

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 27 of 59

Cal. June 1, 2023) (relevant text was “directly” below the action button, and webpage was

“uncluttered,” consisting only of “a field for a phone number, the ‘Continue’ button, and the

[relevant disclosure]”).

Auto-renewal cases. Amazon also cites a small handful of cases in which courts have

granted motions to dismiss under state auto-renewal laws, which, like ROSCA, contain clearand-conspicuous-disclosure requirements. However, it is entirely unremarkable that some other

complaints did not state plausible claims for relief.

Unsurprisingly, the cases cited by Amazon are factually distinguishable. Again, context

matters; in none of the cases did the defendant use Amazon’s tactic of tricking consumers who

are trying to buy a standalone product into instead signing up for an unrelated subscription

service. See supra Section I.A. Additionally, unlike here, none of the cases cited by Amazon

included compelling evidence the defendant knew many ordinary consumers either did not see or

understand the defendant’s disclosure of material terms.

Even ignoring those facts, none of the enrollment pages from these cases contain terms as

facially inconspicuous as Amazon’s. In Walkingeagle v. Google LLC, 2023 WL 3981334, at *4

(D. Or. June 12, 2023), for example, the court found the auto-renewal and price terms shown in

Figure 6 below clear and conspicuous. This page, unlike Amazon’s UPDP and SPC, displays the

service’s price, billing start date, and auto-renewal terms in relatively uncluttered text above the

enrollment button.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 20

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 28 of 59

Complete your purchase

Muslc Premium

Free tnal

$9 99/mo

GPay

old,t>uytnga

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$0.00

START 1-MOHTH TRIAL

Figure 6 (Enrollment Page from Walkingeagle v. Google LLC, 2023 WL 3981334 (D. Or. June

12, 2023))

Similarly, in Gershfield v. Team Viewer US, Inc., 2023 WL 334015 (9th Cir. Jan. 20, 2023), the

Ninth Circuit affomed a district comi's finding the disclosures in Figure 7 below clear and

conspicuous.13 Again, unlike here, the page is uncluttered, the text is all the same size, and the

fact of auto-renewal is bolded immediately above the action button. Amazon's other auto

renewal cases are similarly distinguishable. See Hall v. Time, Inc. , 2020 WL 2303088, at *1

(C.D. Cal. Mar . 13, 2020) (auto-renewal disclosure was "directly above" checkout button and

then again above the "submit order" button), ajf'd, 857 Fed. App'x 385 (9th Cir. 2021); Rutter v.

Apple Inc. , 2022 WL 1443336, at *6 (N.D. Cal. May 6, 2022) (dismissing "vague" claim that

cancellation policy was not disclosed clearly and conspicuously, while granting leave to amend);

Perkins v. NY Times Co. , 2023 WL 3601489, at *4 (S.D.N.Y. May 23, 2023) (auto-renewal

13 The Figure 7 screenshot is available on the district cowt docket:

Gershfield v. Team Viewer US, Inc., et al. , Case

No. 23-cv-0058, Dkt. # 30-3 at 2 (May 11, 2021) .

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 21

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 29 of 59

disclosure was twice displayed above the checkout button, and once "directly above" the

checkout button). 14

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Figure 7 (Enrollment Page from Gershfield v. TeamViewer US, Inc., 2023 WL 334015 (9th Cir. Jan.

20, 2023))

II.

AMAZON FAILED TO OBTAIN CONSUMERS' EXPRESS INFORMED

CONSENT TO AUTOMATICALLY-RENEWING PRIME SUBSCRIPTIONS

(COUNTS I, III).

In addition to requiring Amazon to provide clear and conspicuous disclosure of Prime's

material te1ms, ROSCA required it to "obtain[] a consumer 's express info1med consent" to those

tenns.15 15 U.S.C. § 8403(2). Amazon concedes this consent requires at least the same

"unambiguous manifestation of assent" required for the fonnation of a contract. Mot. at 14.

However, while such assent is necessaiy, it is not sufficient to satisfy ROSCA. ROSCA requires

not just consent but "express informed consent." Here, the Complaint more than plausibly

Recently, anoth er court in this District granted a motion to dismiss state law auto-renewal claims related to

Amazon 's Audible service. See Viveros v. Audible, Inc., No. 23-cv-0925-JLR, 2023 WL 696028 1 (W.D. Wash. Oct.

20, 2023) . That case too presents distinguishable facts: the disclosures were above the enrollment button, and

"[s]everal disclosures [were] reiterated in a box in the upper left" of the enrollment page. Id. at *7. A copy of the

relevant enrollment page is at Viveros Dkt. # 1-2 at 21 .

Amazon concedes that if the FTC has adequately pleaded its ROSCA count for lack of express info1med consent

(Count III), it has also adequately pleaded its FTC Act count based on Amazon's unfair enrollment practices (Count

I). Mot. at 6 n.3.

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 22

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 30 of 59

alleges Amazon fails to obtain express informed consent in two ways: (1) by failing to obtain

any consent to enrollment in Prime and its material terms, and (2) by failing to clearly and

conspicuous disclose Prime’s material terms, resulting in a lack of informed consent.

Amazon Does Not Tell Consumers the Consequences of Clicking Its

“Enrollment” Buttons.

Consumers consent to contract terms by taking “some action, such as clicking a button or

Amazon Does Not Obtain Consent to Prime’s Material Terms.

checking a box, that unambiguously manifest [their] assent to those terms.” Berman, 30 F.4th at

856 (emphasis added).16 However, a user’s button click establishes consent “only if the user is

explicitly advised that the act of clicking will constitute assent to the terms and conditions of an

agreement.” Id. at 857. Therefore, the fact that a reference to “terms and conditions” appears in

“proximity” to, or even “directly above,” an enrollment button is insufficient, standing alone, to

establish consent. Id.; see also Nguyen, 763 F.3d at 1178-79 (“[W]here a website makes its

provides no notice to users nor prompts them to take any affirmative action to demonstrate

assent, even close proximity of the hyperlink to relevant buttons users must click on—without

more—is insufficient to give rise to constructive notice.”). Based on these principles, the Ninth

Circuit in Berman held that consumers who clicked the green “Continue” button in Figure 8

below had not consented to the “Terms & Conditions” referenced immediately above the button.

The Court explained that although the website stated, “I understand and agree to the Terms &

Conditions,” it “did not indicate to the user what action would constitute assent to those terms

and conditions.” Id. at 858. “Likewise,” the Court added, “the text of the button itself gave no

indication that it would bind plaintiffs to a set of terms and conditions.” Id.

Many of the cases cited herein, including Berman, apply state contract law. Federal courts routinely apply

“ordinary state-law principles that govern the formation of contracts.” Nguyen, 763 F.3d at 1175 (quotation marks

omitted).

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 23

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 31 of 59

C,01

nti1

niue >>

- - -

Figure 8 (Enrollment Button in Berman v. Freedom Fin. Netv.•ork, LLC,

30 F.4th 849 (9th Cir. 2022))

Even where websites state that "by clicking" a specific button, the consumer will be

deemed to have agreed to specific te1ms, comis find no consent where the "by clicking"

statement is itself inconspicuous. See, e.g., Cullinane, 893 F.3d at 64 (finding consumer did not

consent to tenns in paii because of inconspicuous "text used to notify potential users that the

creation of an Uber account would bind them to the link te1ms"). The Ninth Circuit, for

example, expressed "skepticism" that a consumer had consented to the "Offer Details" in the

gray box in Figure 9 below, despite the fact that the text immediately above the "YES" button

stated: "By clicking 'Yes,' I have read and agreed to the Offer Details to the right." Lee v.

Intelius, Inc. , 737 F.3d 1254, 1259-60 (9th Cir. 2013).17 The court noted the relevant text,

although directly above the "Yes" button, was in "small, light-colored print." Id. at 1260. The

Comi also considered the context of the transaction, explaining that, as here, the consumer could

reasonably have clicked "Yes" to complete the purchase of the product they had been hying to

buy, rather than to agree to a new conh'act. Id.; see also Applebaum v. Lyfl, Inc. , 263 F. Supp. 3d

454, 467 (S .D.N.Y. 2017) (refusing to find consent because even though consumer checked box

agreeing to hyperlinked tenns, the screen on which consent was pmpo1iedly obtained ''was

structured as paii of a process to verify a phone number," creating the inference that "the Tenns

of Service related only to the [phone text message] verification").

17 Figme 9 is taken from the PACER version of the Ninth Circuit's opinion:

Lee v. Intelius, Inc. , Case No. 11-

35810, Dkt. # 64- 1 at 17 (9th Cir. Dec. 16, 2013) .

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 24

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 32 of 59

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Additionally, comis have held statements below an enrollment button explaining the

consequences of clicking the button do not create consent because "a user could ... click [the

button] without reviewing the remainder of the page." Lopez, 2022 WL 17089824, at *2. At the

ve1y least, when a company relies on a statement below the relevant button to explain the

consequences of clicking the button, that explanation should be immediately below the button.

See, e.g. , In re Ring LLC Privacy Litig. , 2021 WL 2621197, at *5 (C.D. Cal June 24, 2021)

(comis generally find consent "where the user is provided with an oppo1iunity to review the

tenns of service in the fonn of a hyperlink immediately above or below a button that must be

clicked to affinnative acknowledge the tenns" (emphasis added)).

Here, Amazon's UPDP and SPC pages fail to tell users they consent to Prime's auto

renewal and price (and, for many UPDP versions, to enrollment in Prime at all) when they click

various buttons. In some versions ofUPDP, as in Figure 10 below (a cropped version of Figure

1), consumers clicked to "Get FREE Two-Day Delive1y " on their product purchase on the right

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 25

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 33 of 59

side of the page and then were told, on the left side of the page, below the button and in far less

prominent text, that "By signing up," they agreed to Prime's tenns. See also Compl. Att. A.

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The "by signing up" text is inconspicuous standing alone, but even setting that aside, no

reasonable consumer would understand that "by signing up" actually meant "by clicking 'get

free two-day shipping." ' See also Compl. Att. M. At least one comt has rejected similarly

ambiguous "by signing up" language. See Chabolla, 2023 WL 4544598, at *5 ("The textual

notice on the ... webpage refers only to 'signing up.' ... It is unclear whether 'signing up'

means clicking the 'Continue' button ... , completing the sign-up webflow, or something else.").

On other UPDP versions, the emollment button said "Strut my 30-day FREE ti·ial" (see Figure 3

above)- an improvement from "Get Free Two-Day Shipping"- but the text explaining the

consequences of clicking the button was still inconspicuous (in small print fru· from the button)

and did not make cleru· that "signing up" refe1Ted to clicking "Strut my 30-day free ti·ial." See,

e.g., Compl. Atts. C, E, G at 6, I at 3, L at 7, 0 at 5. The UPDP problems ru·e compounded by

the fact that some ordinruy consumers reasonably would not have seen or recognized any

alternative to clicking the orange em ollment button if they wanted to complete their underlying

product purchase; in other words, these consumers would not know they had any option other

than clicking the button. See supra Section I.A. I .

SPC fru·es no better. Specifically, as shown in Figure 11 below (a cropped version of

Figure 5), SPC only displays Prime 's tenns and conditions fru· below, rather than immediately

below, the SPC "Place your order" button. See also Compl. Atts. I at 5, J at 9.

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 26

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 34 of 59

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Figure 11 (Desktop SPC; Comp!. Aft. H

at 6)

The full te1ms and conditions are the fomth set of linked te1ms beneath the "Place your order"

button, located in the third block of text beneath the button, and are not even identified as the

Prime Te1ms and Conditions. Instead, Amazon simply states "By placing your order, you agree

to Te1ms and Conditions," after ah-eady stating the user agreed to an unrelated "privacy notice,"

unrelated "conditions of use," and other unspecified "tenns." Then, in the next sentence,

Amazon finally says, "Your Amazon Prime membership continues until cancelled." Even that

sentence does not indicate that clicking "Place your order" has anything to do with Prime, rather

than the consumer's originally intended product purchase.

Tellingly, Amazon reso1ts to a series of false or misleading statements to suppo1t its

claim to have obtained users' consent to Prime enrollment and Prime 's material te1ms. Mot. at

14-1 6. First, Amazon states that on "eve1y page" containing a Prime enrollment button,

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 27

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 35 of 59

“consumers are informed that clicking the button will enroll them in Prime and/or begin a free

trial period.” Mot. at 14. That is simply not true for the reasons already explained above. Even

if it were true, however, the question is not only whether consumers consented to enrollment in a

Prime trial, but also whether they consented to Prime’s auto-renewal and price terms.

Second, Amazon contends that “nearly every action button itself includes the words

‘Prime’ and/or ‘Free Trial.’” Mot. at 14. Again, this is false. Three of the 12 UPDP pages

attached to the Complaint contain enrollment buttons that do not mention Prime or a free trial.

See Compl. Atts. A, B, M. Further, for all versions of SPC, Amazon’s contention is inconsistent

with its clear-and-conspicuous argument. There, Amazon contends “Place your order” is the

“action button.” See supra Section I.A.2; Mot. at 9. That button, of course, does not include the

words “Prime” or “Free Trial.”

Third, Amazon claims users can only click the enrollment buttons “after viewing the

[material-term] disclosures.” Mot. at 14. This is a flagrant misstatement. The disclosure text is

almost always below the enrollment button, and there is absolutely nothing stopping a consumer

from clicking the button without ever viewing those disclosures. See, e.g., Lopez 2022 WL

17089824, at *2 (where hyperlink was “below the ‘Join’ button, . . . a user could enter their

mobile number and click ‘Join’ without reviewing the remainder of the page (and seeing the

hyperlink)”).18

Amazon Is Not Permitted to Knowingly Charge Millions of

Nonconsensual Prime Members.

Amazon accuses the FTC of omitting the “necessary context” for Amazon’s 2020

estimate that

15-16; Compl. ¶ 178. Specifically, Amazon argues it does not matter the company knowingly

Prime subscribers were “unaware” they were Prime members. Mot. at

The consent cases cited by Amazon are distinguishable on their facts. Mot. at 14-15. In one, customers were

required to click a button “next to text that says ‘by placing your order, you agree to Amazon.com’s privacy notice

and conditions of use.’” Ekin v. Amazon Servs., LLC, 84 F. Supp. 3d 1172, 1173 (W.D. Wash. 2014) (emphasis

added). In the other, text “immediately beneath” the “Continue” button explicitly referenced that consumers agreed

to terms “by continuing”—i.e., clicking the “continue” button. See Adams v. Amazon.com, Inc., 2023 WL 4002534,

at *1 (W.D. Va. June 14, 2023).

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 28

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 36 of 59

continued billing

people who did not know they were in Prime because

is a small number relative to the total number of Prime members, and thus the Commission

cannot prove that a “significant minority” of Prime consumers were misled. Mot. at 15. In

effect, Amazon asks the Court to find these

Amazon customers to be among the

unfortunate “obtuse” consumers whom, Amazon claims, the law does not protect. Id. at 7. This

argument misunderstands the significance of Amazon’s

estimate, disregards

ROSCA’s plain text, and ignores the evidence that Amazon’s disclosures are not clear and

conspicuous.

First, the

- -

unaware Prime members are hardly the limit of those whom

Amazon deceived. The fact that

active subscribers were “unaware” Prime members

in 2020 does not mean that only

Prime members ever unknowingly enrolled in

Prime. Specifically, this number obviously excludes all “members” whom Amazon signed up

without their knowledge prior to 2020, who subsequently realized that fact and cancelled.

Moreover, many consumers may have been tricked into signing up, but then decided to keep

Prime (rather than cancel). That fact says nothing about whether those consumers consented at

the time of their enrollment. In fact, Amazon’s strategy was to convert nonconsensual enrollees

into willing Prime members. See Compl. ¶ 184 (Defendant Lindsay “explained that once

consumers become Prime members—even unknowingly—they will see what a great program it

is and remain members”). Additionally, even a consumer who is “aware” they are a Prime

member does not necessarily know their membership automatically renews. Furthermore, even

were the actual number of deceived enrollees, it is not relevant that

a small percentage of all Prime members because the FTC has only challenged the flows through

which some of Amazon’s members enrolled. Finally, at this point the FTC has to rely on

Amazon’s own untested estimates. This is precisely why courts at this stage draw all inferences

in the plaintiff’s favor.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 29

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 37 of 59

Second, the “significant minority” test is simply not applicable to ROSCA’s requirement

to obtain express informed consent prior to billing any consumers. 15 U.S.C. § 8403(2). Rather,

the Commission developed the test as a method for determining whether consumers’

understanding of implied advertising claims was “reasonable.” See, e.g., In re Kraft, Inc., 114

F.T.C. 40, 121-22 (1991). Specifically, if a “significant minority” of consumers understand an

advertisement to be making a claim (of product efficacy or some other product attribute), then

that minority’s interpretation is considered reasonable and the advertiser violates the FTC Act if

the implied claim is false or misleading. Id. at 121-22, 133. ROSCA, however, unambiguously,

bars billing consumers without “express informed consent.” It simply does not allow Amazon to

use sign-up flows that result in its charging millions of nonconsensual enrollees.19

Third, even on the question whether Amazon’s disclosure of Prime’s material terms was

clear and conspicuous (see supra Section I), the FTC Act’s “significant minority” test does not

save Amazon. Congress enacted ROSCA to go beyond the protections already provided by

existing consumer protection laws. See Washington v. Internet Order, LLC, 2015 WL 918694, at

*5 (W.D. Wash. Mar. 2, 2015) (“Despite the existence of numerous consumer protection laws in

various states, Congress enacted ROSCA to specifically regulate the type of negative-option

selling alleged here . . . .”). Thus, determining whether Prime’s material terms are clear and

conspicuous under ROSCA—not merely whether the flows are nondeceptive under the FTC

Act—cannot be subject to the same test.

In any event, as one of the cases relied upon by Amazon explains, when a defendant

“intentionally attempt[s] to deceive”—which may be true when the defendant’s “false

representations were knowingly made”—courts “presume consumers were in fact deceived” and

shift the burden to the defendant to prove otherwise. See William H. Morris Co. v. Group W,

Inc., 66 F.3d 255, 258-59 (9th Cir. 1995). In such cases, the plaintiff therefore need not prove

Contrary to Amazon’s claim (Mot. at 15 n.11), the FTC has never conceded that the “ordinary” or “reasonable”

consumer standards govern ROSCA’s express informed consent requirement.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 30

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 38 of 59

that a “significant minority” of consumers understood the advertisement to make a particular

claim. Id.

ROSCA requires sellers to obtain consent that is both express and informed. 15 U.S.C.

Amazon Does Not Obtain Informed Consent.

§ 8403(2). Consent can only be informed if consumers notice and understand what they are

consenting to. See, e.g., Marsh v. Zaazoom Solutions, LLC, 2012 WL 952226, at *8 (N.D. Cal.

Mar. 20, 2012) (ROSCA “contemplates full disclosure and transparency of transactions to

consumers”). Therefore, disclosures that are not “clear and conspicuous” “cannot serve as the

basis for customers’ express, informed consent.” FTC v. Health Formulas, LLC, 2015 WL

2130504, at *17 (D. Nev. May 6, 2015). Because the Complaint more than plausibly alleges

Amazon did not make clear and conspicuous disclosures, see supra Section I, it equally plausibly

alleges consumers did not give express informed consent for automatically-renewing Prime

subscriptions.20

III.

ROSCA requires Amazon to provide “simple mechanisms21 for a consumer to stop

AMAZON DID NOT PROVIDE SIMPLE PRIME CANCELLATION

MECHANISMS (COUNT IV).

recurring charges from being placed on the consumer’s credit card, debit card, bank account, or

other financial account.” 15 U.S.C. § 8403(3). “Simple” in this context means “easy.” See, e.g.,

Dictionary.com, https://www.dictionary.com/browse/simple (last accessed Nov. 14, 2023)

(defining “simple” as “easy to understand, deal with, use, etc.”); see also Speech of Hon.

Amazon’s footnoted effort at avoiding liability for its strategy of enrolling Prime members through Prime Video

(Mot. at 15 n.9) is unconvincing. The Complaint plausibly alleges that Amazon did not obtain consent to enroll

consumers in Prime, but rather led them to believe they were merely enrolling in the less expensive Prime Video.

Amazon does so by telling consumers who go to the “Prime Video” storefront that they can “Watch with Prime.

Start your 30-day free trial.” Compl. ¶ 113. Consumers who click that button are told “Watch now, cancel

anytime”—without any reference to Prime’s other benefits, again creating the impression that the sign-up is solely

about Prime Video. Id. ¶ 116. These facts support the reasonable inference that many consumers only consented, if

at all, to Prime Video enrollment, not Prime enrollment.

Without any explanation for its sleight of hand, Amazon replaces the “s” in “simple mechanisms” with brackets in

order to change the statute’s plural “simple mechanisms” to the singular “simple mechanism[].” Mot. at 16. The

distinction, however, does not matter here because Amazon provides no simple mechanism.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 31

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 39 of 59

Zachary T. Space of Ohio, 156 Cong. Rec. E2165-02 (Dec. 15, 2010) (ROSCA requires

businesses to “provide easy ways to opt out of any agreement or subscription service,

empowering consumers to control their enrollment”). Applying this easy-cancellation

requirement, one court found a cancellation process violated ROSCA where, after a consumer

called customer service, “instead of simply processing the cancellation and ending the call,” the

company resorted to “a six-part ‘retention’ sales script aimed at convincing the customer not to

cancel.” United States v. MyLife.com, Inc., 567 F. Supp. 3d 1152, 1167-69 (C.D. Cal. 2021).

The MyLife court correctly held that “[n]o reasonable factfinder could find this mechanism

‘simple.’” Id. at 1169.

Here, the Complaint plausibly alleges that Amazon’s self-described Iliad cancellation

flow was not simple, instead mirroring MyLife’s unlawful retention sales script. Further,

Amazon’s argument that it also offered simple cancellation by phone is contradicted by the facts

set forth in the Complaint.

Amazon’s Iliad Cancellation Flow Was Not Simple.

Amazon complicated its online cancellation process by (1) making it difficult for

consumers to find the starting point for the Iliad Flow and falsely labeling that starting point

“End Membership,” (2) forcing consumers to request cancellation four times before honoring the

request, and (3) repeatedly providing links, buttons, and other distracting information designed to

derail customers before they completed the process. In fact, Amazon measured the success of

the Iliad Flow not by whether it made cancellation easy, but instead by how many cancellations

it prevented.

Amazon Forced Consumers to Find an “End Membership” Button

That Did Not End Membership.

As detailed in the Complaint, to cancel online, Prime members had to both find the

entrance to the Iliad Flow (typically by locating a button reading “End Membership”) and

understand that when they clicked “End Membership,” they had not ended their membership but

instead only started the process. To find the “End Membership” button, a consumer first had to

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 32

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 40 of 59

navigate to the “Prime Central” page. Compl. ¶ 131. To find that page, consumers had to select

the “Account & Lists” dropdown menu on Amazon’s homepage, find the third column of

dropdown links in that menu, and the click the eleventh option in that third column, which

merely said “Prime Membership.” Id. Upon arriving at the Prime Central page, consumers then

had to click “Manage Membership,” which would open a menu that included the “End

Membership” button, as pictured in Figure 12 below. Id. ¶ 132. Immediately above that button,

Amazon placed text reading: “By ending your membership you will lose access to your Prime

benefits.” Clicking “End Membership,” however, did not end one’s membership, or result in

loss of access to Prime benefits, but rather simply started the Iliad Flow. Id. ¶ 133. In other

words, if a consumer clicking “End Membership” reasonably thought he or she had ended their

membership, Amazon nevertheless continued billing them for Prime. Compl. ¶ 140.

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Figure 12 (Prime Central "Manage Membership"

Dropdown; Compl. Att. Q at 2)

Alternatively, a Prime member could attempt to find the Iliad Flow through the Amazon

search bar. On this point, Amazon falsely contends the FTC’s Complaint admits that searching

“Cancel Prime” starts the cancellation process (Mot. at 17) or provides a “direct ingress into

Prime’s cancellation flow” (id. at 18 n.13). In fact, the Complaint clearly states that typing

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 33

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 41 of 59

"Cancel Prime" in the search bar simply brings up a page with a link to "Prime Central," from

which the consumer would need to click the "End Membership" button that does not end

membership. Compl. ,i 137. If the consumer instead searched for "Cancel Membership" in the

Search Bar, an "Alexa Answer" would direct the consumer to a page titled "End Your Prime

Membership." Id. ,i 135. As pictured in Figure 13 below, that "End Your Prime Membership"

page stated: "You can end your Prime membership by selecting the End Membership button on

this page." That was a lie. The button labeled "End Your Prime Membership" did not end your

Prime membership, instead putting the consumer at the staii of the cancellation flow. Id. ,i 136.

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Figure 13 ("End Your Prime Membership II Page; Comp/. Att.

Tat 3)

Finally, consumers could reach the Iliad Flow by contacting Amazon customer service

and asking to cancel. Rather than simply honor the member's cancellation request, the

representative generally would send the consumer a link that put them at the staii of the online

cancellation flow. Compl. ,i,i 134, 139.

PLAINTIFF' S OPPOSITION TO

DEFENDANTS' MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 34

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 42 of 59

After Entering the Iliad Flow, Consumers Had to Request

Cancellation Three Additional Times.

Second, once inside the Iliad Flow, the consumer had to navigate past three more pages,

each of which required them to reaffirm (for the second, third, and fourth times) that they wanted

to cancel. The header on the first page of the Iliad Flow thanked the consumer “for being a

member with us” and invited them to “take a look back at your journey with Prime”—language

that falsely indicates the consumer had already ended that “journey” when they clicked End

Membership. Compl. Att. Q at 3. If the consumer stopped at this point, they would continue

being billed for Prime. Instead, the consumer had to click “Continue to Cancel” on the bottom of

the page. Compl. ¶ 142. That button, however, did not cancel the Prime membership, but took

the consumer to the second page of the Iliad Flow, where the consumer again had to click a

“Continue to Cancel” button that did not cancel their membership. Id. ¶ 146. Finally, on the

third page, consumers could click “End Now” or “End on [Date]” to cancel their memberships.

Id. ¶ 153. Amazon continued to charge any consumer who stopped anywhere short of the final

“End Now” or “End on [Date]” buttons. Id. ¶¶ 140, 154.

The Iliad Flow Provided Repetitive, Distracting Information and

Options to Derail Consumers’ Cancellation Attempts.

Just as the MyLife defendant unlawfully used a “six-part retention script” to complicate

consumers’ cancellation attempts, 567 F. Supp. 3d at 1167-69, Amazon bombarded consumers

who already had chosen to end their Prime memberships with links, offers, and other information

that would remove them from the Iliad Flow. On the first page of the Iliad Flow, for example,

Amazon offered consumers links to “Start shopping today’s deals!” or “start watching videos by

clicking here!” Compl. ¶ 141. Clicking these links removed the consumer from the Iliad Flow.

Id. The first page also offered a “Remind Me Later” and “Keep My Benefits” option, even

though Amazon had already offered the “Remind Me Later” option on the “Manage

Membership” page. Id. ¶ 142. On the second page of the Iliad Flow, Amazon offered alternative

pricing links, such as “Switch to annual payments,” “[A]re you a student?” or “Have an EBT

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 35

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 43 of 59

card/receive government assistance.” Id. ¶ 143. Amazon also, beneath a large warning icon,

invited consumers to view their “Prime exclusive offers.” Id. ¶ 145. The second page also

featured a “Remind Me Later” button (for the third time) and a “Keep My Membership” button

(for the second time). Id. ¶ 146. At the top of the third page of the Iliad Flow, Amazon again

offered “Remind Me Later” (for the fourth time) and “Keep My Membership” (for the third

time). Id. ¶ 148. Consumers who scrolled to the bottom of the page could click to finally end

their membership, but only after ignoring two more links to see their “Prime exclusive offers.”

Id. ¶¶ 149, 151.

Amazon Knew the Iliad Flow Was Not Simple.

The Iliad Flow not only needlessly and unlawfully complicated consumers’ cancellation

processes, but also prevented consumers who wanted to cancel, and thought they had cancelled,

from actually doing so. In fact, rather than aiming to create an easy cancellation process,

Amazon measured the Iliad Flow’s success based on the number of Prime cancellations it

prevented. Compl. ¶ 163. In 2020,

of subscribers who clicked Amazon’s misleading “End

Membership” buttons did not have their memberships cancelled because they did not proceed

through all three subsequent Iliad Flow pages. Id. Amazon may be correct that some people

who entered the Iliad Flow simply changed their minds about cancelling. Mot. at 19. Amazon,

however, simply ignores the fact that in 2020 alone, more than

clicked “End Membership” or otherwise entered but did not complete the Iliad Flow, and

Prime members

subsequently used no Prime benefits within the next 30 days. Id. ¶ 163. This fact alone supports

the reasonable—and at the pleading stage, mandatory—inference that at least those

consumers thought they cancelled Prime but actually had not. In any event, the fact that Amazon

may have succeeded in changing some consumers’ minds does not mean it was permitted to use

an unlawfully complex cancellation process to do so.22

Amazon could, of course, have tried to change someone’s mind immediately after processing their cancellation.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 36

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 44 of 59

Amazon attempts to defend its illegal practices with a series of implausible and irrelevant

factual assertions. See Mot. at 18-20. Amazon first claims the Iliad Flow merely “ensures

members cancel with complete and accurate information, rather than by mistake or

misunderstanding.” Id. at 18. But there is no realistic possibility—and certainly not one that is

cognizable at the pleading stage—that a consumer who searches out and clicks a button labeled

“End Membership” did so by “mistake” or simply “misunderstood” what the words “End

Membership” mean.

Maybe, Amazon adds, consumers click “End Membership” “out of curiosity” or to see if

Amazon would offer them a better deal.23 Mot. at 19. Again, at the pleading stage, that is not an

inference the Court can draw. Additionally, Amazon is welcome to provide “complete and

accurate information” to Prime members throughout their Prime membership or even

immediately after they cancel; what Amazon cannot lawfully do is repeatedly refuse to cancel

memberships for the sake of providing more and more “information,” all in the hope that the

consumer will give up, whether accidentally or intentionally.

Finally, Amazon provides no support for its fallacious claim that the Iliad Flow “reflects

the FTC’s own recommendations.” Mot. at 19. Moreover, Amazon’s reference to Iliad as

reflecting “widely understood industry practice” (id.) is both unsupported and, in any event,

irrelevant to whether Amazon’s cancellation process was “simple.”

Amazon Redirected Consumers Who Attempted to Cancel by Phone to the

Iliad Flow.

The Complaint alleges Amazon “required customer service representatives to encourage

consumers seeking to cancel”—including those who had expressly “ask[ed] to cancel”—to

instead “do so via the Iliad Flow.” Compl. ¶¶ 134, 139. Amazon cannot require customer

Amazon claims the FTC agrees that attempts to retain consumers by offering them deals just prior to, rather than

just after, cancellation is “pro-consumer.” For that proposition, however, Amazon cites a concurring statement by a

single former Commissioner. Mot. at 19 (citing Ex. 3 at 6 & n.2 (Concurring Statement of Commissioner Noah

Joshua Phillips)).

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service agents to divert callers to the complex Iliad Flow and then escape liability by claiming

phone cancellation, for anyone permitted to complete it, is simple.24

IV.

THE INDIVIDUAL DEFENDANTS HAD THE AUTHORITY TO CONTROL OR

DIRECTLY PARTICIPATED IN AMAZON’S VIOLATIONS.

The Individual Defendants concede, as they must, that they are liable for Amazon’s FTC

Act and ROSCA violations if they “participated directly in, or had the authority to control, the

unlawful acts or practices at issue.” Individuals’ Mot. at 9 (emphasis added) (quoting FTC v.

Commerce Planet, Inc., 815 F.3d 593, 600 (9th Cir. 2016)). For all their handwringing about the

FTC’s “shocking” decision to sue them, purportedly in “[defiance of] a century of the FTC’s

own standards” (Individuals’ Mot. at 1, 5), Defendants Lindsay and Ghani do not dispute the

FTC has pled sufficient facts demonstrating their authority to control or direct participation in

Amazon’s unlawful enrollment practices (Counts I-III). Instead, they only challenge the

sufficiency of the FTC’s allegations regarding their involvement in Amazon’s unlawful

cancellation practices (Count IV). Defendant Grandinetti argues the FTC’s allegations are

insufficient on both enrollment and cancellation. The Individual Defendants’ arguments all fail.

The Complaint More Than Adequately Pleads Grandinetti, Lindsay, and

Ghani’s Liability for Amazon’s Unlawful Cancellation Flow (Count IV).

Individual Defendants argue the Complaint fails to adequately plead individual liability

for Amazon’s cancellation practices because the pleadings do not meet Rule 9(b)’s particularity

requirement for claims alleging “fraud” or “mistake.” This argument fails for two reasons. First,

Rule 9(b) does not apply to the FTC’s statutory claim that Amazon and the Individual

Defendants failed to implement simple Prime cancellation mechanisms. Second, under any

pleading standard, the FTC has plausibly alleged each Individual Defendant had the requisite

authority to control or directly participated in Amazon’s unlawful conduct.

Amazon also claims members can “initiate the cancellation process by using Amazon’s online chat feature,” but

Amazon cites paragraph 139 of the Complaint, which does not mention an online chat feature. Nor is that “feature”

referenced anywhere else in the Complaint. In fact, the Complaint makes clear that its references to “contacting”

customer service refer exclusively to phone calls. See Compl. ¶ 129 (to cancel, consumers “had to use the Iliad

Flow or call customer service” (emphasis added)).

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Rule 9(b) Does Not Apply.

Individual Defendants, without explanation, declare the FTC’s claims against them

“sound in fraud” and, therefore, the heightened Rule 9(b) standard applies. Individuals’ Mot. at

7-8. That is incorrect. Rule 9(b) only applies to a claim where (1) fraud is an “essential

element” of the claim or (2) the plaintiff “allege[s] a unified course of fraudulent conduct and

relies entirely on that course of conduct as the basis” for the claim. Vess v. Ciba-Geigy Corp.

USA, 317 F.3d 1097, 1103 (9th Cir. 2003). Here, fraud is self-evidently not an “essential

element” of the claim that Defendants did not provide simple Prime cancellation mechanisms.

Therefore, Rule 9(b) only applies if the FTC’s cancellation claim alleges a “unified course of

fraudulent conduct and relies entirely on that course of conduct” to support the claim—e.g., if the

claim is based on “intentional and ongoing misrepresentations.” Dyson, Inc. v. Garry Vacuum,

LLC, 2010 WL 11595882, at *5 (C.D. Cal. July 19, 2010); see also Smith v. GlaxoSmithKline

Consumer Healthcare Holdings (US) LLC, --- F. Supp. 3d ----, 2023 WL 2768453, at *8 (N.D.

Cal. Mar. 9, 2023) (claim alleged “unified course of fraudulent conduct” where defendant had

“long advertised [drug] as effective . . . despite knowing the product is ineffective”).

Here, the FTC’s cancellation claim, detailed in paragraphs 127-163 of the Complaint,

focuses primarily on the difficulty of the Iliad Flow, rather than relying on “intentional and

ongoing misrepresentations.” There is therefore no basis for applying Rule 9(b). Tellingly, the

Individual Defendants provide no meaningful argument to the contrary, instead citing cases

related to other, non-ROSCA FTC Act violations that more closely resemble fraud, and even

then misleadingly describing those cases. See Individuals’ Mot. at 7-8.25

In one case cited by the Individual Defendants, the court declined to decide whether Rule 9(b) applied. See FTC

v. Am. Fin. Benefits Ctr., 324 F. Supp. 3d 1067, 1076 n.3 (N.D. Cal. 2018). In another case, the court theorized that

Rule 9(b) “may serve an important safeguarding function” where the government is a plaintiff and “brings an

accusation of implicit dishonesty,” but the court again declined to decide Rule 9(b)’s applicability. FTC v. Cantkier,

767 F. Supp. 2d 147, 155 (D.D.C. 2011) (emphasis added).

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Even if Rule 9(b) applied, the Amended Complaint is sufficiently detailed to meet this

Under Any Pleading Standard, the FTC Plausibly Alleges Each

Individual Defendant Had Authority to Control or Directly

Participated in Maintaining the Iliad Flow.

standard because it identifies “the who, what, when, where, and how of the misconduct charged.”

Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (quotation marks

omitted).26 Contrary to Individual Defendants’ arguments about diffuse responsibility within

Amazon, the FTC need not establish sole authority to control to prevail against an individual

defendant. See, e.g., FTC v. World Media Brokers Inc., 2004 WL 432475, at *9 (N.D. Ill.

Mar. 2, 2004) (finding individual liability where executive “did not have sole control”).

Additionally, an individual can be held liable based on authority to control even if they did not

“exercise” that authority. FTC v. Loewen, 2013 WL 5816420, at *7 (W.D. Wash. Oct., 29,

2013). Here, although an “individual’s status as a corporate officer . . . is sufficient to show the

requisite control,” FTC v. Dinamica Financiera LLC, 2010 WL 9488821, at *10 (C.D. Cal. Aug.

19, 2010) (citing FTC v. Publishers Clearing House, 104 F.3d 1168, 1170 (9th Cir. 1997)), the

Complaint’s allegations go further by detailing the scope of the Individual Defendants’ authority

over the Iliad Flow, as well as, for Lindsay and Ghani, their direct participation in Amazon’s

decision not to fix the violations.

First, the Complaint alleges Individual Defendants are all corporate officers of Amazon

with the specific authority to direct and manage Prime.27 Grandinetti is the Amazon Senior Vice

President overseeing Prime, including the Iliad Flow, meaning he had—and still has—the

authority to direct changes to the Prime cancellation process. See Compl. ¶¶ 19, 21. From

Rule 9(b), even if it applies, does not require that the FTC plead each individual’s role in Defendants’ misconduct

with particularity. See FTC v. Benning, 2010 WL 2605178, at *4 (N.D. Cal. June 28, 2010) (“[I]f the precise

[corporate] fraudulent acts and practices are outlined with particularity, pleading an individual’s ‘authority to

control’ with ‘particularity’ would not advance the notice purpose behind Rule 9(b).”)

Individual Defendants are incorrect that the Complaint “lumps” them together. Individuals’ Mot. at 15-16.

Rather, the Complaint sufficiently “differentiate[s] [its] allegations” by “identify[ing] the role of each defendant.”

United States v. United Healthcare Ins. Co., 848 F.3d 1161, 1184 (9th Cir. 2016) (quotation marks omitted).

Moreover, “[t]here is no flaw in a pleading . . . where collective allegations are used to describe the actions of

multiple defendants who are alleged to have engaged in precisely the same conduct.” Id.

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February 2018 through November 2021, Lindsay was “the Amazon executive with the most

responsibility for the Prime subscription program” and, in that role, “received internal

memoranda, emails, and oral communications describing the Iliad Flow and the complications it

presented to Prime subscribers attempting to cancel.” Id. ¶¶ 14, 17(b). Ghani, a Vice President

overseeing Prime, is “an Amazon executive with authority over the Prime . . . cancellation

process.” Id. ¶ 24. The Amended Complaint alleges all three executives oversaw—and

Grandinetti and Ghani continue to oversee—Amazon subordinates who studied the Iliad Flow,

including the barriers the flow erected to prevent subscribers from canceling. Despite having the

authority to do so, the Individual Defendants failed to implement any of the simpler alternatives

their subordinates designed because those alternatives would have adversely affected Amazon’s

bottom line. Id. ¶¶ 7, 16-17 (Lindsay), 21-22 (Grandinetti), 24-25 (Ghani).

Alternatively, the Complaint pleads that Ghani and Lindsay participated directly in

maintaining the complex Iliad Flow by slowing or rejecting changes that would have simplified

it. Compl. ¶ 6. An Amazon senior researcher, for example, formed the “Clarity Working

Group” (“CWG”), which produced proposals to improve the cancellation processes across all of

Amazon’s subscription programs, including Prime, and highlighted consumers’ trouble finding

and completing the existing cancellation flows. Id. ¶ 218. The Clarity Working Group presented

these proposals and findings to Ghani, who in turn presented them to Lindsay. Id. ¶¶ 218, 220.

The Amended Complaint alleges Lindsay and Ghani participated in Amazon’s failure to

implement the CWG’s proposals, or make any changes to the Iliad Flow in the United States,

until long after the FTC started its investigation. Id. ¶¶ 221-230. These allegations, taken

together, raise more than a plausible inference that Lindsay and Ghani directly participated in

maintaining Amazon’s unlawful cancellation process. For the same reason, the Individual

Defendants are simply incorrect when they state they had no “meaningful role in the Prime

cancellation flows” or in “modifying them, or directing others to do so.” Individuals’ Mot. at 15.

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Moreover, the cases on which the Individual Defendants rely do not support their

argument. In FTC v. Quincy Bioscience Holding Co., Inc., 389 F. Supp. 3d 211, 220

(S.D.N.Y. 2019), the court found the complaint sufficiently alleged that both the president and

the CEO of the corporate defendant had the authority to control the practices at issue, but not that

the CEO had knowledge of those practices. Proof of knowledge, however, is only necessary to

obtain equitable monetary relief from individuals, not to prove liability, and the Individual

Defendants do not challenge the FTC’s ability to obtain equitable monetary relief (as opposed to

civil penalties) here.28 See Publishers Clearing House, 104 F.3d at 1170-71 (explaining that

proof of “knowledge” of wrongdoing is only necessary for the FTC to obtain “restitution”). The

Individual Defendants also rely on FTC v. Swish Mktg, 2010 WL 653486 (N.D. Cal. Feb. 22,

2010), which found “individual liability insufficiently pled where it was alleged only that (a) the

individual defendant, Benning, was the CEO of the corporation; and (2) consumers had filed

complaints with the defendants, the BBB, and law enforcement.” FTC v. Am. Fin. Benefits Ctr.,

324 F. Supp. 3d 1067, 1080 (N.D. Cal. 2018) (citing Swish Mktg., 2010 WL 653486, at *5-6)

(cleaned up). As described above, the allegations in the Amended Complaint far exceed that bar.

The Complaint More Than Adequately Pleads Grandinetti’s Liability for

Amazon’s Unlawful Enrollment Practices (Counts I-III).

Regardless of which pleading standard applies,29 the Amended Complaint sets forth

sufficient facts demonstrating Grandinetti’s authority to control Prime’s unlawful enrollment

processes and direct participation in maintaining those processes.

As discussed infra Section VI, there is a knowledge requirement applicable to the FTC’s civil penalties request,

which the FTC’s Complaint adequately pleads. There too, Quincy Bioscience does not help the Individual

Defendants because the Quincy Bioscience complaint failed to allege the CEO knew about corporate

misrepresentations, see 389 F. Supp. 3d at 221; here, by contrast, the Complaint alleges the Individual Defendants

were aware of Amazon’s enrollment and cancellation misconduct.

Because Counts I-III rely in part on Amazon’s failure to clearly and conspicuously disclose material information,

they more closely resemble the type of FTC deception cases in which Ninth Circuit district courts are split on the

applicability of Rule 9(b). See Am. Fin. Benefits, 324 F. Supp. 3d at 1076 n.3 (“Courts within the Ninth Circuit and

elsewhere are split as to whether Rule 8 or Rule 9(b) applies to claims brough under Section 5 of the FTC Act.”).

While Rule 9(b) should not apply, see, e.g., FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1204 n.7 (10th Cir.

2005), the Amended Complaint satisfies either pleading standard.

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First, as explained above, Grandinetti is the Amazon Senior Vice President overseeing

Prime. Thus, he had—and still has—the authority to direct changes to the Prime enrollment

process. He also exercised that authority. In 2018 and 2019, Amazon’s Shopping Design

Organization could not agree with its Prime Organization on whether to implement fixes to

Amazon’s unclear enrollment flows. See Compl. ¶¶ 199-202. In particular, the Prime

Organization did not want to implement clarity improvements that would decrease enrollment.

Id. ¶ 199. In Amazon, when two groups have a dispute they are unable to resolve, they can

escalate the dispute to the person with authority over both groups to “break the tie.” Id. ¶ 202.

Here, the dispute was escalated to Grandinetti precisely because he had “authority” over both

organizations. Id.

Second, and relatedly, Grandinetti, in response to the escalation, directly participated in

maintaining Prime’s unlawful enrolment flows by vetoing “any changes that would reduce

enrollment” and “directing the Prime Organization to improve the checkout enrollment flow as

much as it could—but only ‘while not hurting signups.’” Compl. ¶¶ 207-08. He made that

decision after reading a memorandum stating that “Prime signups are not always transparent”

and “customers sign up without knowing they did.” Id. ¶¶ 205-06. Grandinetti cannot prevail on

his motion to dismiss by minimizing this entire course of events as mere attendance at “a single,

multi-organization meeting in 2019.” Individuals’ Mot. at 10.

THE COMPLAINT DOES NOT VIOLATE DEFENDANTS’ DUE PROCESS

RIGHTS.

Next, Defendants assert the action should be dismissed because the Complaint violates

their due process rights. Mot. at 20-27; Individuals’ Mot. at 12-15. In particular, Defendants

argue the FTC’s supposed “dark patterns theory”—but not the FTC Act or ROSCA—is

unconstitutionally vague and deprived them of “fair notice.” Individual Defendants further

assert that the rule of lenity should apply in their favor. These arguments all fall flat.

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Defendants’ Vagueness Arguments Fail Because ROSCA and the FTC Act

Are Clear and the FTC Has Not Asserted a “Dark Patterns Theory.”

Amazon and the Individual Defendants assert the FTC’s “proposed ‘dark patterns’

standard is unconstitutionally vague.” Mot. at 20; Individuals’ Mot. at 12. For two reasons, this

due process argument fails.

First, as even the cases Defendants cite make clear, the vagueness doctrine applies where

a statute or regulation fails to provide a reasonable opportunity to know what conduct is

prohibited. See Mot. at 20-24 (citing cases holding statutes or regulations unconstitutionally

vague); Kashem v. Barr, 941 F.3d 358, 369 (9th Cir. 2019) (“The void-for-vagueness doctrine

. . . guarantees that ordinary people have ‘fair notice’ of the conduct a statute proscribes.”

(quoting Sessions v. Dimaya, 138 S. Ct. 1204, 1212 (2018)) (emphasis added)); Orion Ins. Group

v. Wash. State Off. of Minority & Women’s Bus. Enters., 2017 WL 3387344, at *14 (W.D. Wash.

Aug. 7, 2017) (holding a “law is unconstitutionally vague if it fails to provide a reasonable

opportunity to know what conduct is prohibited”) (quoting United States v. Mincoff, 574 F.3d

1186, 1201 (9th Cir. 2009) (emphasis added)). Critically, Defendants do not argue the FTC Act

or ROSCA are “vague.” To the contrary, Defendants concede ROSCA is a “clear statute.” Mot.

at 24; see also id. at 20 (asserting “Amazon satisfies ROSCA’s plain terms” (emphasis added));

Individuals’ Mot. at 13 (referring to ROSCA’s “three simple tenets”).30

Second, even without that fatal flaw, Defendants’ arguments rest on a blatant falsehood—

that the FTC’s Complaint “assumes that . . . a prohibition [on dark patterns exists],” or attempts

to “enforce a supposed prohibition against ‘dark patterns.’” Mot. at 20. In support of this

assertion, Amazon cites to four Complaint paragraphs that merely use the phrase “dark patterns.”

Id. (citing Compl. ¶¶ 2, 8, 176, 231). No paragraph alleges the existence of a dark patterns

prohibition. Rather, for the detailed reasons explained supra Sections I-IV, the Complaint

Even if Defendants had not conceded the point, they could not establish ROSCA or the FTC Act are

unconstitutionally vague. In civil cases, “[l]esser degrees of specificity” are permitted and “[t]he standards are

especially lax for civil statutes that regulate economic activities.” Wyndham, 799 F.3d at 250 (quotation marks

omitted). “For those statutes, a party lacks fair notice when the relevant standard is so vague as to be no rule or

standard at all.” Id. (quotation marks omitted).

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plausibly alleges Defendants violated existing law (the FTC Act and ROSCA) by failing to

provide clear and conspicuous disclosures, obtain express informed consent, and provide simple

cancellation mechanisms. Defendants used, among other strategies, manipulative design

elements sometimes called “dark patterns” to commit these specific violations, just as scores of

FTC defendants have done in the past. See generally Dkt. #87-13 (discussing other FTC cases

involving dark patterns). In short, Defendants miscast the FTC’s Complaint as alleging

violations of a non-existent dark patterns ban, rather than what they admit are ROSCA’s “plain

terms,” and then improperly attack the supposed ban on due process grounds.

Amazon attempts to bolster its strawman attack on the FTC’s purported “dark patterns

theory” by noting that “dark patterns” are not mentioned in ROSCA or the FTC Act. Mot. at 23.

Amazon cites to two cases—Butcher v. Knudsen and Bynum v. U.S. Capitol Police Board— that,

it claims, transform this modest observation into a constitutional violation. See Mot. at 23.

However, these cases are patently inapposite. In both, a private party challenged a regulation as

unconstitutionally vague, and the government responded by attempting to “clarify” the

regulation’s meaning with an interpretation found nowhere in its text. In each case, the court

found the regulation vague and rejected the government’s attempts to save it with purportedly

clarifying language. See Butcher v. Knudsen, 38 F.4th 1163, 1175 (9th Cir. 2022)

(administrative rule requiring registration of political committees was unconstitutionally vague

notwithstanding Montana’s extratextual assertion that the regulation excluded “casual political

acts”); Bynum v. U.S. Capitol Police Bd., 93 F. Supp. 2d 50, 57-59 (D.D.C. 2000) (ban on

“demonstration activity” in the U.S. Capitol was insufficiently clear despite government’s

extratextual assertion that the regulation included a ban on “prayer”). Here, by contrast,

Defendants have not asserted ROSCA or the FTC Act are vague, and the FTC has not attempted

to import a “dark patterns” ban into either statute.

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Defendants Had Fair Notice of What ROSCA and the FTC Act Require.

Neither Amazon nor the Individual Defendants can save their “vagueness” arguments by

recasting them as a failure by the FTC to provide “fair notice.” As an initial matter, “fair notice”

and “vagueness” doctrines substantially overlap—indeed, vagueness may be established by

demonstrating a lack of fair notice. See, e.g., Butcher, 38 F.4th at 1169 (“In evaluating whether a

law is unconstitutionally vague, we ask whether it fails to provide a person of ordinary

intelligence fair notice of what is prohibited.” (quotation marks omitted)); see also FCC v. Fox

Television Stations, Inc., 567 U.S. 239, 253 (2012) (“A fundamental principle in our legal system

is that laws which regulate persons or entities must give fair notice of conduct that is forbidden

or required.”). Therefore, Defendants’ “fair notice” arguments fail for the same reasons as their

“vagueness” arguments—they are not attacking a statute or regulation, but rather a (non-existent)

“theory.”

Additionally, when a “case involves ordinary judicial interpretation of a civil statute,” the

“relevant question is not whether [defendant] had fair notice of the FTC’s interpretation of the

statute, but whether [defendant] had fair notice of what the statute itself requires.” FTC v.

Wyndham Worldwide Corp., 799 F.3d 236, 253-54 (3d Cir. 2015) (emphasis original). That is

precisely the case here. As in Wyndham, “the FTC is asking the federal courts to interpret [the

FTC Act and ROSCA] . . . to decide whether [these statutes] prohibit[] the alleged conduct.” Id.

at 253. Because Defendants do not even attempt to demonstrate that they lacked fair notice of

what ROSCA and the FTC Act require, they plainly had the required fair notice.

In support of its “fair notice” argument, Amazon cites General Electric Co. v. EPA,

53 F.3d 1324, 1329 (D.C. Cir. 1995), for the proposition that regulated parties must be able to

determine “with ‘ascertainable certainty,’ the standards with which the agency expects parties to

conform.” Mot. at 21. But the “ascertainable certainty” standard is inapplicable here. A party

may be entitled to “ascertainable certainty” of an agency’s standards if a court must “defer to an

agency interpretation” of a statute or regulation (e.g., where applying Chevron or Auer

deference), or the agency itself is acting as the adjudicator. Wyndham, 799 F.3d at 254. Neither

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is the case here. Because “this case involves ordinary judicial interpretation of a civil statute, . . .

the ascertainable certainty standard does not apply.” Id. at 253. In other words, Amazon’s

argument fails for the straightforward reason that it is the Court, not the FTC, that will determine

whether Defendants violated the two clear statutes at issue here.

FCC v. Fox Television Stations is similarly inapposite. See Mot. at 24; Individuals’ Mot.

at 12. Fox held the FCC failed to provide broadcasters fair notice of the FCC’s “indecency”

rules before sanctioning them through the FCC’s own administrative adjudicatory process.

567 U.S. at 253-54. This holding has no bearing on this case because, again, this case “involves

ordinary judicial interpretation of a civil statute,” and the Court, not the FTC, is the adjudicator.

Wyndham, 799 F.3d at 253. For the same reason, Karem v. Trump, 960 F.3d 656 (D.C. Cir.

2020), does not help Defendants. See Mot. at 26; Individuals’ Mot. at 14-15. Karem enjoined

the White House Press Secretary’s decision—effectively, an executive branch adjudication—to

revoke a reporter’s pass, because there were no “explicit rules” governing suspensions. Karem,

960 F.3d at 664-66.

Amazon, moreover, argues that, based on the “widespread industry use of negative

options and so-called ‘dark patterns’” there is “simply no way” it could have had “fair notice”

that its conduct was “unlawful.” Mot. at 26. As discussed, the FTC has brought many

enforcement actions regarding negative options and unfair and deceptive conduct, including

cases in which dark patterns contributed to that deception. See generally Dkt. # 87-13.

However, even if Amazon’s assertion were true, the fact that others in the industry may also be

violating the law provides no due process defense.31 Nor is it relevant that “[n]one of those

practices [challenged in certain other ROSCA cases] is at issue in this case,” Mot. at 23-24, or

In a footnote, Amazon asserts “the FTC’s ‘dark patterns’ theory raises serious questions under the First

Amendment.” Mot. at 21 n.15. Amazon does not meaningfully develop this argument, so it is waived. See, e.g.,

Okorocha v. Duff, 596 F. App’x 537, 539 (9th Cir. 2015). In any case, even if Defendants’ conduct were speech,

“commercial speech is not entitled to any First Amendment protection if it is misleading or related to illegal

activity.” NetChoice, LLC v. Bonta, 2023 WL 6135551, at *5 (N.D. Cal. Sept. 18, 2023) (citing Central Hudson

Gas & Elec. Corp. v. Pub. Serv. Comm’n of New York, 447 U.S. 557, 563-64 (1980)).

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that the FTC has previously sought individual liability under ROSCA only against CEOs,

Individuals’ Mot. at 14-15. The fact that the FTC may sue other companies or individuals for

different conduct that also violates ROSCA does not make either ROSCA or the FTC Act

unconstitutionally vague.

Finally, Amazon asserts “the FTC has admitted” the “current legal framework—as the

FTC wants to interpret it—is unclear,” because the FTC is engaged in negative option

rulemaking, held a related workshop, and wrote in a Notice of Proposed Rulemaking (“NPRM”)

that the “framework” “does not provide clarity about how to avoid deceptive negative option

disclosures and procedures.” Mot. at 24-25 (quoting Dkt. #87-1 at 4). As a threshold matter, the

quoted statement comes nowhere near establishing ROSCA or the FTC Act are

unconstitutionally vague or fail to provide fair notice, and Defendants do not argue otherwise.

See, e.g., Wyndham, 799 F.3d at 250 (statute is invalid “where the relevant standard is so vague

as to be no rule or standard at all”). Beyond that, the NPRM consistently expresses that the

Commission is simply seeking to “improve . . . existing regulations for negative option

programs.” Dkt. #87-1 at 2; see also id. at 13 (negative option rule will provide “more

specificity”). Relatedly, Amazon faults the FTC for its supposedly “premature attempt to

legislate through litigation,” suggesting the FTC must wait until it enacts the “proposed, future

rule” covering negative options. Mot. at 26. The notion that the FTC cannot enforce ROSCA,

which has been in effect for more than a decade, until the FTC promulgates a separate rule is

absurd and finds no support in the law. See 15 U.S.C. § 8404 (authorizing enforcement by

Federal Trade Commission).

The Rule of Lenity Is Inapplicable.

The Individual Defendants also argue the rule of lenity requires the law be “construed

strictly” in their favor. Individuals’ Mot. at 12. This assertion is patently incorrect because the

rule of lenity applies only to ambiguous criminal statutes. See, e.g., United States v. Shill, 740

F.3d 1347, 1354-55 (9th Cir. 2014) (“The rule of lenity requires ambiguous criminal laws to be

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600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

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interpreted in favor of the defendants subjected to them.” (cleaned up)). ROSCA and the FTC

Act are neither ambiguous nor criminal statutes. The Individual Defendants cite to Justice

Gorsuch’s (non-majority) opinion, joined by only one other Justice, in Bittner v. United States,

598 U.S. 85, 101 (2023), but that opinion changes nothing. Rather, it would have applied the

rule of lenity (had it commanded the majority) to a statute that “ha[d] criminal as well as civil

ramifications.” Id. at 103. In particular, the statute at issue imposed both “civil penalties” and

“criminal sanctions” for “willfully violating” the Act. Id. That is not the case here.

VI.

DEFENDANTS ARE LIABLE FOR CIVIL PENALTIES BECAUSE THEY

KNEW THEY WERE VIOLATING ROSCA.

Defendants all concede the FTC Act permits the Court to impose civil penalties if they

violated ROSCA “with actual knowledge or knowledge fairly implied on the basis of objective

circumstances.” 15 U.S.C. § 45(m)(1)(A); Mot. at 27; Individuals’ Mot. at 15-16. This is not, as

Defendants claim, an “actual knowledge” requirement. Mot. at 27; United States v. Tech.

Commc’ns Indus., Inc., 1986 WL 15489, at *3 (E.D.N.C. Dec. 22, 1986) (“Actual knowledge is

not required.”) Rather, the FTC may prevail by proving either that Defendants were actually

aware of ROSCA’s existence and that they were violating it, or that “a reasonable person under

the circumstances would have known of the existence of [ROSCA] and that the action[s] charged

violated [ROSCA].” United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 141 (4th Cir. 1996).

Here, taking the facts in the light most favorable to the FTC, the Complaint more than

sufficiently alleges Amazon and the Individual Defendants knew, or should have known, both of

ROSCA’s existence and that Amazon’s enrollment and cancellation flows violated ROSCA.

Neither Amazon nor the Individual Defendants dispute the Complaint sufficiently pleads

Defendants Knew of ROSCA’s Existence.

they knew, or should have known, of ROSCA’s existence. Mot. at 27-28; Individuals’ Mot.

at 15-17.32 Nor could they—Amazon is “one of the world’s largest and most well-resourced

In a separate, non-penalty section of their motion, the Individual Defendants assert, without explanation, that “the

FTC does not . . . allege” they knew about ROSCA. Individuals’ Mot. at 13. That throwaway line is insufficient to

raise the argument and is incorrect for the reasons explained above.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

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Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

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companies” with “extensive legal resources including in-house and outside counsel with

expertise in the FTC Act, ROSCA, and the company’s other consumer protection obligations.”

Compl. ¶ 259. The Individual Defendants were high-level executives tasked with managing

Prime—the world’s largest subscription service—including its enrollment and cancellation

flows. See supra Section IV. As such, each was a key decision-maker with respect to the Prime

enrollment and cancellation flows. See id. ROSCA is one of the primary statutes governing

those activities. Unsurprisingly, Individual Defendants also “routinely conferred with such in-

house counsel . . . regarding obligations under the FTC Act, ROSCA, and other consumer

protection laws and regulations.” Compl. ¶ 259. All of these facts support the reasonable

inference Defendants were aware of ROSCA.

The Complaint pleads more than sufficient facts to demonstrate Defendants’ actual

knowledge of their ROSCA violations or, at a minimum, that a reasonable person (or entity) in

Defendants’ position would have recognized they were violating ROSCA. Faced with these

undeniable facts, Amazon pretends the Complaint’s only allegation relevant to knowledge is

The Complaint More Than Plausibly Alleges Defendants’ Actual Knowledge,

or “Knowledge Fairly Implied,” of Their ROSCA Violations.

paragraph 259 (Mot. at 28), but the Complaint is replete with allegations supporting Amazon’s

actual knowledge or knowledge “fairly implied” of its ROSCA violations. In fact, there is an

entire complaint section titled “Amazon’s Knowledge of Nonconsensual Enrollment” (Compl. at

60, ¶¶ 177-187) that Amazon tellingly ignores in its penalty argument. Among other facts,

Amazon knew

Amazon documents referred to “accidental” sign-ups as a “well documented” issue (id. ¶ 179),

and Amazon deprioritized efforts to “right size” the Prime membership to only include

of Prime members who cancelled never meant to sign up (id. ¶ 177),

“intentional and genuine members” in order to maximize profits (id. ¶ 183). See also supra

Section I.C.

The Individual Defendants, like Amazon, make the false claim that the FTC “pleads only

a single fact” demonstrating knowledge. Individuals’ Mot. at 16. In fact, the Complaint alleges

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

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Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 58 of 59

the Individual Defendants received extensive warnings about problems with Prime’s enrollment

and cancellation processes, all of which support the reasonable inference that they at least had

“knowledge fairly implied” of Amazon’s violations. In 2018, for example, Lindsay was told that

the Prime Organization “identified the need to increase clarity during the Prime sign-up.”

Compl. ¶ 194. In 2019, Lindsay and Grandinetti were told that Prime “customers sign up

without knowing they did,” particularly in the product-checkout flows described supra Sections

I.A-B, and that other customers had difficulty “understand[ing] Prime’s price and auto-renew

feature.” Compl. ¶ 205. In 2020, Ghani and Lindsay allowed clarity improvements to go

forward—until they saw how much of an impact the improvement had on member balance (i.e.,

profits). Id. ¶¶ 213-17. All of this was sufficient, in fact, for Lindsay to foresee a lawsuit like

this one, writing to Ghani about “the risk of regulatory action in some countries.” Id. ¶ 222.33

Defendants’ use of spurious privilege claims to conceal enrollment- and cancellation-

related communications also establish their consciousness of guilt. See Compl. ¶ 235; In re

Grand Jury Matter, 147 F.R.D. 82, 87 (E.D. Pa. 1992) (inaccurately labelling documents

“privileged and confidential” was “indicative” of attempt to shield them from investigative

authorities). For instance, Lindsay and Ghani “included phrases such as ‘for counsel’ or ‘seeking

counsel’ or similar at the beginning of email correspondence addressing issues related to

Nonconsensual Enrollment or the Iliad Flow . . . when the correspondence did not contain a

request for legal advice.” Compl. ¶ 235(a). In one email, an Amazon employee nonsensically

declared “clarity” of Amazon’s enrollment and cancellation practices to be a “P&C [privileged &

confidential] topic.” Id. In another, an Amazon Vice President declared it “not appropriate” to

For these same reasons, it is farcical for the Individual Defendants to claim that the FTC’s civil penalty request

relies “entirely on the cynical, speculative, and baseless inference that because the Individuals consulted with

counsel, they must have been advised that their conduct was illegal.” Individuals’ Mot. at 16. Additionally, the

FTC does not, and will not, ask the Court to infer knowledge of illegality from consultations with counsel. Rather,

the FTC’s allegation that the Individuals consulted with counsel about ROSCA (Compl. ¶ 259) is one fact

supporting they knew ROSCA existed—a point they do not meaningfully contest.

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

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Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

Case 2:23-cv-00932-JHC Document 125 Filed 11/17/23 Page 59 of 59

discuss the lack of clarity in an Amazon enrollment page “over email, and increasingly a mass

one at that.” Id. These are not the actions of a company that knows it has done nothing wrong.

CONCLUSION

For the foregoing reasons, the FTC respectfully requests the Court deny Defendants’

motions to dismiss.

LOCAL RULE 7(e) CERTIFICATION

I certify that this memorandum contains 16,685 words, in compliance with the Court’s

September 29, 2023 Order (Dkt. #75).

Dated: November 17, 2023

/s/ Evan Mendelson

EVAN MENDELSON (D.C. Bar #996765)

OLIVIA JERJIAN (D.C. Bar #1034299)

THOMAS MAXWELL NARDINI

(IL Bar #6330190)

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington DC 20580

(202) 326-3320; emendelson@ftc.gov (Mendelson)

(202) 326-2749; ojerjian@ftc.gov (Jerjian)

(202) 326-2812; tnardini@ftc.gov (Nardini)

COLIN D. A. MACDONALD (WSBA # 55243)

Federal Trade Commission

915 Second Ave., Suite 2896

Seattle, WA 98174

(206) 220-4474; cmacdonald@ftc.gov (MacDonald)

Attorneys for Plaintiff

FEDERAL TRADE COMMISSION

PLAINTIFF’S OPPOSITION TO

DEFENDANTS’ MOTIONS TO DISMISS

Case No. 2:23-cv-0932-JHC - 52

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20580

(202) 326-3320

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.