Amazon’s $ 2.5 billion settlement of $ 2.5 billion is a giant victory for the company

But the most exuberant celebrations Thursday occur in the executive consequences of the headquarters of Amazon DC and Seattle.

And for a good reason.

The case, deposited for the first time by the FTC in 2023, under Lina Khan, then president, described a variety of ways of which Amazon used deceptive web design tactics, called “dark models”, to make buyers online to register without knowing it to its first -rate program when buying, or making it frustrating for someone to cancel a premium (which cost the case deposited). The FTC cited a “four -page cancellation process, six clicks and fifteen options” – was referred internally by the initiates of Amazon as “Iliad” – that the agency declared the customers distracted or derailed on their way to cancel the members.

It was a bad look for Amazon, and since the case was targeting one of Amazon’s most important products directly, the issues were high.

Amazon’s prospects seemed to brighten up in January when Donald Trump was inaugurated as 47th president and Khan was replaced as president of the FTC. Whether precise or not, the perception inside Amazon was that the new FTC management would be much more ready for a regulation than Khan. (Before directing the FTC, Khan had made his name as a critic of Amazon at the Faculty of Law and then helped direct the major investigation of the Chamber’s Judicial Committee in 2019 and 2020.)

But no regulations have occurred. And then things got worse for Amazon.

Last week, before the trial begins, the federal judge presiding over the case gave the FTC a partial victory by judging that certain Amazon actions violated the law on consumer protection by not revealing the terms of a main membership before collecting the invoicing information of a consumer. The judge also judged that the leaders appointed in the pursuit of the FTC could be personally responsible if a jury had ruled against Amazon.

This could have been enough to push the business to settle. But this week, the trial began. At this point, if you were a bettor, you would probably not find the chances of Amazon very encouraging.

And Amazon’s decision to pay billions to settle the case just days after the trial certainly seems to confirm Amazon’s weakness.

So why a victory for Amazon?

Of course, it is easy to start with the numbers. Calling $ 2.5 billion, a wrist slap would be absurd. But let’s be clear: The total amount of $ 2.5 billion is equal to around 13 days of profit for Amazon according to its financial results in the last 12 months. Or, with regard to income, less than two days of sales.

As this is the standard for these types of colonies, Amazon did not have to admit reprehensible acts, even if it has changed many practices in question after the start of the FTC investigation. And the leaders did not supervise premium either who were appointed in the case, and who could have been found personally responsible if the jury had ruled for the FTC.

The company is also able to avoid new media coverage of the case and the details of the actions of the company which have the potential to embarrass Amazon and to tarnish its reputation among consumers. Instead, in a few days, the news cycle will move on to something else and you might imagine that the majority of consumers could never think twice in the case.

This is why for some former FTC officials, under whom the case began, the announcement of the regulation was difficult to swallow.

On the one hand, the amount of 1.5 billion dollars which will be paid to consumers “is not nothing”, and the fact that a president of the FTC defended by Trump has a case of the Biden era at this point “is quite striking in the right direction,” said a former senior FTC in FTC Fortune.

But the official had trouble understanding the justification for the installation at this stage, after the favorable decisions of the judge last week, and after the agency has already invested heavy resources to carry the case tried. Any savings in the installation agency now, compared to the case all the distance over the next month, would probably be relatively low.

“Why not go through the trial at this stage?” Asked the former rhetorical official. “What are you saving?” A few days in hotel rooms? ”

Maybe you might say that allegations in the trial alone perforated the self-portrait of Amazon as an “customer obsession” and could erode customer confidence, as I noted in Fortune Earlier this week.

Perhaps the regulations alone are sufficient deterrence for Amazon leaders to reflect twice of controversial practices like those in the case.

But a decision of the responsibility of the jury and greater media coverage along the way would probably have had a greater impact for the FTC (assuming, of course, a great victory of the FTC – which probably seemed but could not be guaranteed).

Everyone is home with something

Instead, it looks a bit like a winner-win.

The FTC manages to proclaim a large high level number and a victory.

“Today, Trump-Vance’s FTC has marked history and has obtained a record monumental victory for the millions of Americans who are tired of the deceptive subscriptions that seem impossible to cancel,” said FTC president Andrew N. Ferguson, in the press release.

And Amazon also arrives quite easily, without any admission of reprehensible acts.

“Amazon and our leaders have always followed the law, and these regulations allow us to move forward and focus on innovation for customers,” said the company in its own declaration.

Now, in the regulatory circles, the spotlights move to the Historic Antitr Historical Trial of the FTC against Amazon, which is supposed to be judged in 2027. This affair is even more critical for Amazon, carrying the prospect of serious remedies which could include a rupture or forced changes which disturb the commercial model of Amazon.

And after the surprise settlement on Thursday, the obvious question is as follows: how do the chances of another Amazon-FTC regulation are increasing now?

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