Who: Amazon and the ASA
When: 4 March 2015
Law stated as at: 1 April 2015
The ASA upheld two separate issues of complaint against Amazon Europe Core Sarl (“Amazon”) in relation to Amazon’s 30 day free trial for Amazon Prime.
Amazon conducted a direct mailing campaign in which consumers were sent a letter offering them a “30 day free trial” of Amazon Prime. The letter clarified in small print at the bottom of the letter that the paid subscription “starts automatically after free trial unless cancelled.”
Several complaints were made to the ASA, challenging whether the advert was misleading because:
1. it did not make sufficiently clear that a paid subscription would automatically start if not cancelled during the free trial; and
2. it did not state what the cost of the subscription would be.
Defending the campaign, Amazon argued that it was clear that a paid subscription would automatically start if membership was not cancelled during the 30 day free trial and that, on multiple occasions in the mailing, consumers were directed to a web page that further notified customers that an automatic charge would be incurred.
Regarding the lack of information on the cost of the subscription, Amazon stated that customers would be provided with full information on the cost of the Amazon Prime subscription during the registration process and that this was sufficient to make customers aware of the costs of subscription.
Unfortunately for Amazon, the ASA did not agree and upheld both aspects of the complaints. The ASA noted that marketing communications “must make clear the extent of the commitment consumers must make in order to take advantage of a “free” offer” and that the automatic subscription was not mentioned in the body of the mailing’s text.
The ASA also noted that, at no point did the mailing state the subscription price that customers would automatically be subjected to, should they fail to cancel their subscription in time. The amount of the subscription fee was deemed by the ASA to be “material information and a condition of the offer which consumers should be made aware of” and, therefore, Amazon had breached the CAP Code by failing to state the fees in the advert.
Why this matters:
The finding serves as a reminder of the importance of not only taking care when making a “free” claim but also ensuring that all of the relevant financial commitments that the customer will be subject to are made as clear as possible.