Uber (UBER.US) is under investigation by the FTC for allegedly violating consumer protection laws with its subscription plans.
1min read The U.S. Federal Trade Commission is investigating whether Uber's flagship subscription plan, Uber One, violates consumer protection laws. The subscription plan offers discounts on ride and delivery orders, and Uber said in October that about 25 million people subscribed to Uber One.
The FTC is investigating Uber's product registration and cancellation issues, according to a document, and the probe began earlier this year. Uber confirmed it received FTC inquiries about the subscription plan and said it is cooperating with the agency's investigation.
"We will continue to answer any questions the FTC may have about our cancellation policy. The Uber One cancellation process follows the letter and spirit of the law — Uber One members can easily cancel their membership in the app. In fact, most cancellations take 20 seconds or less," Noah Edwardsen, a spokesman for Uber, said in a statement.
The FTC declined to comment.
The FTC enforces consumer protection laws against companies that mislead consumers about subscription terms. The agency recently sued several companies, including Amazon and Adobe, for making it too difficult to cancel subscriptions. But the FTC's consumer protection investigations don't always lead to enforcement actions, and the agency often seeks fines in settlements because of its limited ability to win fines in court and a 2021 Supreme Court ruling that further weakened the agency.
The FTC sent Uber a proposed complaint on Nov. 5, a few days after the U.S. election, seeking to resolve the investigation through a settlement and asking Uber to respond within a week, according to a letter sent by Uber's outside counsel to the five commissioners at the FTC. The letter complains that the settlement proposed by the FTC commissioners was rushed and demanded "substantial sums of money" for alleged violations of the law, less than two months after the agency began its investigation.
Uber's lawyers said the company's offer was rejected by FTC staff. The lawyers criticized the agency's staff for "trying to complete any case in record time" before President Trump takes office in January.
Republican FTC commissioner Melissa Holyoak said the allegations were "very troubling" and the FTC may be "rushing to judgment" before the upcoming government transition. She asked the staff in the consumer protection division to provide updates on all cases they are seeking to resolve in the next two months. Trump has yet to name a new head for the FTC.