The upcoming Amazon settlement of $ 2.5 billion is a giant victory for the company

But the most clear celebrations may occur on Thursday within the executive wings at the Amazon’s DC headquarters and the Seattle headquarters.

For a good reason.

The case, which FTC first presented in 2023 under the President of Lina Khan, has identified a variety of methods that Amazon used Web design tactics, known as “dark patterns“To get online shoppers to register in an unauthorized manner in his main program when making a purchase, or making it difficult for someone to cancel a major membership (cost $ 139 annually when submitting the case). A way to cancel membership.

It was a bad look at Amazon, and given that the case was directly directed to one of the most important Amazon products, the risks were high.

The expectations for Amazon shone in January when Donald Trump was opened as president 47 and Khan was Khan It was replaced as FTC President. Whether it was accurate or not, the perception inside Amazon was that the new FTC driving would be more than the Khan. (Before the FTC leadership, Khan made her name as a critic of the Faculty of Law, and later helped lead in the leadership of the great technology investigation in the House of Representatives in 2019 and 2020.)

But no settlement occurred. Then things get worse for Amazon.

Last week, before the trial began, the federal judge who headed the case gave the Federal Trade Committee a partial victory by the ruling that some Amazon actions violated the Consumer Protection Law by not disclosing the main membership conditions before collecting bills information to the consumer. The judge also ruled that the executives named FTC can be personally responsible if a jury ruled against Amazon.

This may be sufficient to push the company to settle. But this week the trial started. At this stage, if you are a betting man, you may not find the possibilities of Amazon very encouraging.

It appears that Amazon’s decision to cancel billions to settle the case within just a few days in the trial appears to confirm the weak Amazon hand.

So why is Amazon winning?

Of course, it is easy to start numbers. To summon $ 2.5 billion for the lamp on the wrist will be silly. But let’s be clear: The total amount of the total settlement of $ 2.5 billion is about 13 days of profit for Amazon based on its financial results over the past 12 months. Or when it comes to revenue, less than two days of sales.

As for these types of settlements, Amazon also had to recognize any violations, although they changed many practices concerned after the start of the FTC investigation. Executive officials did not supervise Prime who were named in the case, and who could have been found personal responsibility if the jury had ruled FTC.

The company is also able to avoid further media coverage of the situation and details of the company’s actions that had the ability to embarrass Amazon and distort its reputation among consumers. Instead, within a few days, the news cycle will continue, and you can imagine that the majority of consumers may not think about the case twice.

For this reason for some former officials of the Federal Trade Committee, who started under the case, the declaration of the settlement was difficult.

On the one hand, the amount of $ 1.5 billion that will be paid to the consumers “is not something”, and the fact that the Trump -backed FTC chair took a case in the Biden era at all “is very great in a good way. luck.

But the official struggled to understand the logical basis for the settlement at this stage, and after the judge’s sentences last week, and after the agency has already invested the heavy resources in submitting the case to the trial. Any agency savings from the settlement are likely to be, in exchange for taking the case at a full distance during the next month, relatively small.

“Why don’t you pass the trial at this stage?” The former official asked a letter. “What do you save? A few days in the hotel rooms?”

Perhaps, you can say that allegations in the case alone have punctured the autonomous Amazon image of the company that focuses on the “customer obsession” and customer confidence has eroded, I also thought about luck Earlier this week.

The settlement alone may be the sufficient deterrence of executives in Amazon to think twice in controversial practices such as those in the case.

But the ruling of the jury with responsibility, and more media coverage along the way, was likely to have a greater impact on FTC (assuming, of course, a great victory in the Federal Trade Committee – which seemed likely to be likely but of course it could not be guaranteed).

Everyone goes home with something

Instead, this is like winning.

FTC gets a large number of first degree and winning.

Andrew n said. Ferguson in the press statement: “Today, Trump-Vances FTC made a date and got a tremendous victory, for millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel.”

The Amazon can also move forward as well, without any admission of error.

The company said in its own statement: “Amazon and our executive managers have always followed the law and allowed us to move forward and focus on innovation for customers.”

Now, in the organizational circles, the limelight moves to a lawsuit against the fight against historical monopoly in FTC against Amazon, which is supposed to go to trial in 2027. This condition is more important for Amazon, as it bears the possibility of severe treatments that may include disintegration or forced changes that disrupt the Amazon business model.

After settling the surprise on Thursday, the clear question is: To what extent does the chances of the other Amazon/FTC level?

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