Thought by some as the most significant challenging case for Amazon, the Federal Trade Commission (FTC) plans to sue Amazon for various violations. According to the sources who are familiar with the FTC investigations, Amazon allegedly operates illegally by collecting and using children’s data through its Alexa-powered smart speakers.
Another potential lawsuit that the agency will file against Amazon is a “wide-ranging antitrust case targeting Amazon’s retail operations” which could include the “bundling of services through its Prime subscription business” and its “use of competitor data to out-muscle rival retailers on its platform” in relation to FTC’s two open privacy investigations for Amazon.
Amazon is the leading online retailer in the US and FTC has been investigating the company since 2019. The agency concluded that Amazon collected and used data from its users who are under the age of 13, therefore violating the Children’s Online Privacy Protection Rule (COPPA).
According to Bloomberg, which reported the FTC’s plan first, the U.S. Department of Justice (DOJ) may file the lawsuit on the agency’s behalf possibly next month. The potential lawsuit is a result of four-year investigation by various advocacy groups. The organizations that conducted the investigation include the Center for Digital Democracy and the Campaign for a Commercial-Free Childhood, also known as Fairplay. These groups filed a complaint with the FTC against Amazon.
This is not going to be the first time FTC sued Amazon. The agency filed a lawsuit against the company for illegally withholding tips from some delivery drivers. Amazon settled the case and paid almost $60 million reimbursement for the drivers.
As a process for the lawsuit, FTC should first refer the complaint to the DOJ’s civil division. After that, the DOJ will have 45 days to file a case. However, if the DOJ declines to file a case, the FTC can file a complaint on its own. The FTC is pursuing on the so-called “dark pattern” probe against Amazon, a deceptive strategy used by company websites to deceive users.
In addition, the FTC is also conducting a probe regarding Amazon’s deceiving advertising technique on its “Amazon Choice” label in the market place, on how it is used to promote products.
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