Amazon.com, Inc. (AMZN.US) has been ruled to have improperly collected user billing information, increasing the risk of lawsuits over Prime subscriptions.

A U.S. district court judge has ruled that Amazon.com, Inc. violated consumer protection laws by collecting subscription users' billing information before disclosing Prime membership terms. This ruling is a victory for the Federal Trade Commission (FTC) in its efforts to crack down on the company's deceptive practices. It has been reported that the FTC is trying to prove that Amazon.com, Inc. enrolled tens of millions of consumers in Prime membership without their consent, and made it "difficult" for them to cancel subscriptions through "complex" cancellation methods. The case is scheduled for a hearing next week (September 22). The above ruling by the U.S. district court judge puts Amazon.com, Inc. at a disadvantage in the upcoming trial. The agency also accused Amazon.com, Inc. of withholding documents related to the case, including emails instructing employees to inaccurately label documents related to Prime membership, and said that the mandatory Prime registrations were so widespread that the company had to create a "clearer web" for customers who may have mistakenly registered multiple times. The judge also ruled that if the FTC proves Amazon.com, Inc. engaged in illegal conduct during the trial, two Amazon.com, Inc. executives will be held accountable. Additionally, Amazon.com, Inc. is prohibited from using the Defense of the "Restore Online Shoppers' Confidence Act" as applicable to Prime membership registrations. The head of the FTC's Consumer Protection Bureau stated in a release, "Today's ruling confirms that Amazon.com, Inc. deceived American consumers by failing to disclose all of the terms of Prime before collecting consumers' payment information."