A federal judge in Seattle has dismissed a class action lawsuit accusing Amazon of misleading Prime members about free grocery delivery from Whole Foods. The lawsuit alleged that Amazon's initial advertising of "free delivery" was deceptive as the company later introduced a $9.95 delivery fee.
Consumers Affected: Prime members who purchased groceries from Whole Foods and were charged the $9.95 delivery fee.
Reason for Lawsuit: Allegations of false advertising, bait-and-switch tactics, and drip pricing under Washington state consumer protection laws.
Outcome: The court dismissed the lawsuit, stating that the plaintiffs failed to prove Amazon's advertising was misleading and noting the service fee was clearly displayed during checkout.
E-commerce giant Amazon has successfully defended itself against a class action lawsuit alleging misleading customers about the benefits of its Prime membership. A federal judge in Seattle dismissed the lawsuit, which accused Amazon of falsely advertising free grocery delivery for Whole Foods purchases, Reuters reports.
The class action lawsuit, filed in 2022, alleged Amazon engaged in deceptive business practices by initially advertising "free delivery" for Prime members on Whole Foods purchases, only to later introduce a $9.95 delivery fee. The plaintiffs sought to represent potentially hundreds of thousands of Prime members who felt misled by this change.
Specifically, the lawsuit accused Amazon of violating Washington consumer protection laws through:
Amazon, who bought Whole Foods in 2017 for $13.7 billion, countered that the benefits of Prime membership are subject to change and that the company has the discretion to add or remove perks. The company also emphasized that the service fee was clearly displayed during the checkout process.
U.S. District Judge Tana Lin sided with Amazon, ruling that the plaintiffs had failed to adequately demonstrate that Amazon's advertising was misleading under a Washington state consumer protection law. The judge also noted that the service fee was prominently displayed during checkout.
While the dismissal allows the plaintiffs to amend their lawsuit, Lin suggested they focus their revised complaint on the claim that some consumers might have believed free delivery from Whole Foods was a guaranteed benefit for the entire duration of their Prime membership.
Amazon has faced a wave of legal challenges in recent years, spanning various areas of its business. The Federal Trade Commission is probing allegations that Amazon stifles competition and artificially inflates prices.
Meanwhile, consumer class action lawsuits accuse Amazon of using its market dominance to unfairly raise prices on e-books and impose excessive charges on authors for audiobook distribution. A Seattle court recently certified a class action lawsuit alleging Amazon tricked consumers into unwanted subscriptions by making cancellation difficult, thereby violating consumer protection laws in California and Oregon.
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