Highlighting the increasing regulatory focus on paid subscription cancellation, the Federal Trade Commission has taken action against Care.com, alleging that the company systematically deceived users as to the wages and jobs information they could access on Care.com, and failed to provide a simple method for users to cancel their paid memberships. As part of its settlement, Care has agreed to pay $8.5 million to the FTC.
Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and associate Morgan Spina published an article in Bloomberg Law entitled “FTC’s Focus on Subscriptions Protects Consumers: Legal Insight.” In the article, Andy and Morgan provide a comprehensive overview of the complexities surrounding automatic renewal subscriptions, a payment model increasingly used by e-commerce businesses. The article offers critical advice for companies looking to navigate the evolving regulatory landscape, particularly in light of recent state and federal developments. Andy and Morgan highlight key areas of focus, including the importance of clear enrollment terms, streamlined cancellation processes and the implications of the FTC’s recent actions against major players like Amazon and Adobe. "Companies should ensure customers aren’t forced to reject a barrage of offers before the cancellation request is processed or are somehow taken out of the cancellation path if they are considering a save offer," they advise. Andy and Morgan emphasize that businesses must stay ahead of regulatory changes to avoid costly litigation and maintain consumer trust.
Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and associate Morgan Spina published an article in New York Law Journal entitled “Regulation of Automatic Renewals Remains Key Issue for Lawmakers.” In the article, Andy and Morgan discuss the revision of statutes surrounding subscription renewal fees, specifically those that are relevant to the cancellation of automatic renewals.
Alleged “dark patterns” now in play in at least four separate actions
Last year, this blog reported about Dorobiala v. Amazon.com, a private class action pending in federal court in the Western District of Washington against Amazon over the "dark patterns” Amazon used to hamper consumers from canceling their subscriptions to the Amazon Prime program. As described in a recent blog post, the Federal Trade Commission (“FTC”) upped the ante in June by filing suit against Amazon in the same court.
Meanwhile, not only is Dorobiala is still pending, there are at least two other ...
The Federal Trade Commission (“FTC”) has filed a complaint against Amazon.com, Inc. (“Amazon”), asserting that the online retail giant “knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service.” Specifically, the FTC alleges that Amazon has used “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions, and made it incredibly difficult for consumers to cancel those subscriptions.
The complaint, filed in the District Court for the Western District of Washington on June 21, 2023, is ...
Olshan partner Andrew Lustigman, Chair of the firm's Advertising, Marketing, and Promotion's Practice and Co-Chair of the Brand Management & Protection Practice, and associate Morgan Spina published an article on April 21 in Sports Litigation Alert (subscription required) focusing on how services such as MLB's Apple TV+ arrangement must adhere to compliance obligations in a rapidly changing regulatory environment.
FTC’s Proposed New Rules for Businesses Selling Subscriptions Heighten Compliance Obligations, published in The New York Law Journal