A Judge Throws Out Lawsuit Over Alleged “Hidden” Delivery Fees on Whole Foods Purchases with Prime Membership

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A federal judge in Seattle has dismissed a proposed class-action lawsuit against e-commerce giant Amazon. The lawsuit accused Amazon of misleading customers about the benefits of its Prime subscription service, specifically regarding delivery fees for purchases from Amazon-owned Whole Foods. 

The lawsuit, filed in 2022, claimed that Amazon’s marketing regarding Prime membership and Whole Foods deliveries was “deceptive” and likely to confuse consumers. The plaintiff, who remained unnamed in court documents, argued that Amazon led them to believe they would receive free delivery from Whole Foods as part of their Prime membership but then charged them a hidden $9.95 service fee. 

However, U.S. District Judge Tana Lin ruled on Thursday that the lawsuit failed to establish a strong enough case of deceptive practices under Washington state’s consumer protection law. According to the judge, the plaintiff did not provide sufficient evidence demonstrating which specific Amazon advertisements led them to believe free delivery from Whole Foods was included with Prime membership. Additionally, Judge Lin noted that the service fee for deliveries was clearly displayed on two separate webpages during the checkout process.

While the initial lawsuit was dismissed, Judge Lin left the door open for the plaintiff to refile with a more focused claim. The judge suggested the lawsuit could be amended to argue that some consumers might have reasonably believed free delivery from Whole Foods was a guaranteed benefit of Prime membership throughout the subscription period.

This case highlights the ongoing debate surrounding the evolving benefits of subscription services like Amazon Prime.  In 2017, Amazon acquired Whole Foods for a staggering $13.7 billion. Initially, some Prime members enjoyed the perk of free delivery from Whole Foods. However, in 2021, Amazon began charging a “service fee” for these deliveries, impacting both Prime members and non-Prime customers.

The lawsuit reflects a broader trend of legal challenges Amazon faces concerning its business practices. The company is currently battling lawsuits in state and federal courts from consumers, businesses, and even government agencies. These lawsuits raise concerns about Amazon’s market dominance, potential anti-competitive practices, and alleged price manipulation in certain product categories, such as eBooks. Amazon has consistently denied any wrongdoing in these cases.

While this particular lawsuit regarding Whole Foods delivery fees has been dismissed for now, it serves as a reminder of the importance of clear communication  and transparency when it comes to subscription services and their evolving benefits.