Amazon (NASDAQ:AMZN) has accused the Federal Trade Commission of harassing its top executives, including founder Jeff Bezos and chief executive Andy Jassy, as part of an investigation into the e-commerce company’s Prime membership program.
Why Amazon is Under Scrutiny
Since March 2021, the regulator has been investigating whether AMZN (NASDAQ:AMZN) used deceptive tactics to entice customers to join Amazon Prime, the $139-per-year subscription plan that provides free shipping and other benefits.
The FTC may investigate whether AMZN (NASDAQ:AMZN) unjustly complicates the membership cancellation process for customers.
Amazon (NASDAQ:AMZN) argued in a August 5th filing that was made public by the regulator on Monday, that the inquiry had become “unduly burdensome” on workers and executives after at least 19 had been handed particular person subpoenas — or Civil Investigative Demands — to provide proof.
The company demanded that the FTC quasi-suppress or limit the demands, which it claimed served no other purpose but to “harass Amazon’s highest-ranking officials and disrupt its business operations.”
Amazon (NASDAQ:AMZN) indicated that briefing Bezos and Jassy on “granular” details would be a huge load for them. At a minimum, the company claimed that the deadline for providing the information must be extended.
The FTC failed to respond to a request for comment. Amazon did not respond to calls for further comment.
The e-commerce company (NASDAQ:AMZN) claimed the FTC’s unexpected demands followed months of inactivity and that the company and its leadership had only weeks to comply. It stated that the FTC had circumvented its authorized employees in order to serve subpoenas directly to individuals, causing “confusion” and “delay.”
In addition to Bezos and Jassy, the company’s chief of retail Doug Herrington, and head of global shopper Russell Grandinetti, were also served with subpoenas.
Former executives Dave Clark, former head of global consumer, and Greg Greeley, former head of Prime, have also been served.
The filing alleged that the FTC unlawfully denied at least one subpoenaed employee full access to Amazon’s legal team. It reported a contentious investigation hearing that lasted only “a few minutes” until AMZNs attorney was asked to leave by FTC employees, causing the witness to observe.
Prime has been hailed as the e-commerce company’s success key, with members occasionally spending more money than non-members. Amazon’s direct revenue from subscription fees was $8.7bn in the second quarter, or roughly 7% of the company’s total revenue for the period.
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