• by Wendy Davis  @wendyndavis, March 18, 2024

Amazon must face claims that it violated consumer protection laws in three states by offering to “sell” digital videos, while actually retaining the right to revoke access, a federal judge ruled.

The ruling, issued late Friday by U.S. District Court Judge Ricardo Martinez in Seattle, stems from a class-action complaint over Prime Video's use of the “buy” button, which gives users the option to “purchase” downloads of movies and television programs.

He found that allegations in the complaint, if proven true, could show that Amazon materially misled consumers.

“Suppose, for example, a consumer 'bought' Barbie and Oppenheimer for $19.99 each from Amazon, anticipating having a 'Barbenheimer' weekend event,” he wrote. “But after watching Barbie, she finds Oppenheimer now unavailable because Amazon suddenly lost its license to the film. Not sublime!”

The decision comes in a battle dating to 2020, when California resident Amanda Caudel first sued the company for allegedly engaging in false advertising by giving consumers the option to “buy” online videos. 

U.S. District Court Judge Kimberly Mueller in Sacramento dismissed Caudel's complaint in 2021, writing that Caudel hadn't herself lost access to videos she purchased.

Caudel subsequently amended her claims and transferred her complaint to the Western District of Washington. Seven other video purchasers made similar allegations in other complaints, and the matters were consolidated in front of Martinez.

The consumers allege that Amazon only licenses digital content, and that if its license is terminated, the company no longer allows purchasers to access the digital videos. The complaint includes claims that Amazon violated consumer protection laws in California, New York, and Washington.

Amazon urged Martinez to throw out the case at an early stage, arguing that its reservation of the right to revoke access didn't harm the plaintiffs.

The company also said it disclosed in the “conditions of use” and Prime Video terms that digital content could become unavailable.

“The parties’ contracts therefore eliminate any plausible inference that plaintiffs were deceived about what they were buying,” Amazon wrote last year in a motion urging Martinez to dismiss the case.

Lawyers for the consumers countered that Amazon's disclosures weren't prominent enough to counter the impression created by the “buy” button.

Martinez rejected Amazon's argument for now, but suggested he could revisit the company's contentions at a later date.

“Giving plaintiffs the benefit of every inference at this stage, the court finds that it is not clear that Amazon’s terms and conditions sufficiently informed plaintiffs that their digital content was not, in fact, 'bought' in the usual sense of the term but was 'limitedly licensed' and subject to cancellation,” he wrote. “Plaintiffs have raised a factual dispute regarding this disclosure that the court declines to determine at this stage in the proceedings.”