US FTC Sues Uber Over Deceptive Subscription Practices

New Delhi: The United States Federal Trade Commission (FTC) has filed a lawsuit against Uber Technologies Inc, accusing it of unfair or deceptive billing and cancellation practices.

Uber has been accused of charging consumers for its Uber One subscription service without obtaining proper consent and making it deliberately difficult for users to cancel a subscription they previously authorised even though it advertises “cancel any time” facility.

The FTC complaint, filed in the US District Court for the Northern District of California, alleges Uber violated both the Federal Trade Commission Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which requires companies to clearly disclose terms, provide informed consent from consumers and make it easy to cancel a subscription when a consumer has authorised a recurring subscription.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” said FTC chairman Andrew N Ferguson. “The Trump-Vance FTC is fighting back on behalf of the American people. Today, we’re alleging that Uber not only deceived consumers about their subscriptions, but also made it unreasonably difficult for customers to opt for cancellation.”

The FTC contended that Uber misled users when it claimed that in cities with Uber One, consumers would save $25 a month but did not subtract the real subscription price which could have been as much as $9.99 a month. The agency claims that the saving claims were puffed-up and crucial details concerning the subscription were concealed in tiny grey letters that most consumers never noticed.

Furthermore, the complaint states that selected users were placed in the subscription without consent. One user claimed he was charged for Uber One even though he never had an Uber account.

The FTC further attacked Uber for its cancellation mechanism, which, according to the commission, could take as many as "23 screens and 32 ". Customers were frequently coerced into retaining their subscriptions through futile attempts to discourage cancellation, such as being asked to explain their decision, offered discounts to retain their subscriptions, or told to call on customer support without a reliable method to do so. Customers indicated that they were charged again while these cancellation requests were pending response from Uber support.

The lawsuit comes at a time when dark patterns are increasingly coming in for scrutiny, a reference to manipulative interface designs that alter the behaviour of a consumer online. The latest FTC action reflects a strong position against the digital platforms that engage in this.

Prof Bijon Kumar Mishra, an international expert in consumer policy, told ETV Bharat that the case underlines the necessity for global regulatory oversight of tech platforms. "Companies are making profit which is due to them. There is always an urgent need for having regulations to have this oversight to check there is no unethical practice," Mishra said.

He stressed on the need of a special regulator in the mobility and the delivery space. "Till the time law or regulation is made, people will not fear and do whatever comes to their mind. To create that fear, a regulator is needed to protect people," he said.

Mishra pointed out that regulations must be such that consumers do not misuse them. "A regulator is needed so that neither the company nor the consumer misuse it. If there is no cancellation fee, people will do mindless booking. So these fees are needed to bring discipline," he asserted.

The case filed by the FTC against Uber will now move to court, where it will be decided whether Uber violated federal laws or not. The commission's vote approving the complaint was 2-0, with commissioner Mark R Meador recused.

Uber has not commented on the lawsuit so far.