The Context
In September 2025, the US Federal Trade Commission (FTC) secured a historic $2.5 billion settlement against Amazon.com, Inc. The enforcement action named Senior Vice President Neil Lindsay and Vice President Jamil Ghani as individual defendants. The core finding was systematic deception: between June 2019 and June 2025, Amazon deliberately designed user interfaces to enrol consumers into its Prime service without consent and obstructed cancellations. The penalty comprises a $1 billion civil penalty and $1.5 billion in consumer redress for 35 million customers. Internal documents proved knowledge, quoting executives describing the practice as “a bit of a shady world” and “an unspoken cancer.”
The Risk
This is not mere negligence. It is evidence of a deliberate, board-sanctioned strategy to deceive. For a New Zealand director, the parallels are stark. The Companies Act 1993 imposes a duty to act in good faith and in the best interests of the company. Knowingly authorising or permitting a deceptive commercial practice that generates revenue may constitute a breach of this duty. The Fair Trading Act 1986 prohibits misleading and deceptive conduct. A systemic, interface-level scheme to trick consumers would almost certainly contravene it, attracting penalties of up to $600,000 for an individual. More critically, documented internal knowledge creates a direct line of sight from the unlawful act to the boardroom. This may indicate a failure of the duty of care, skill, and diligence. If a similar scheme were operated from New Zealand, directors could face personal liability for fines and, in extreme cases, disqualification. The $2.5 billion precedent sets a new benchmark for penalties against corporate deceit.
The Control
Directors must demand forensic, independent audits of all customer-facing digital enrolment and cancellation processes. Scrutinise the user journey for ‘dark patterns’—design elements that manipulate choice. The board’s compliance committee must treat consumer interface design as a core governance risk, with sign-off at the highest level. Assume regulators will subpoena all internal communications concerning conversion metrics and customer complaints.
The Challenge
These are the critical questions you should be raising at the board table:
| Can you provide absolute assurance that no internal communication—in any channel—discusses our customer conversion tactics using terms like ‘confusing’, ‘shady’, or ‘cancer’, as was evidenced in the Amazon case? | |
| What is the specific, documented process for legal and governance review before any change is made to a digital interface that affects a consumer’s financial commitment? | |
| If the Commerce Commission executed a dawn raid tomorrow, which of our current revenue-generating practices would we be most concerned to have them label as a ‘deliberately constructed complex process’ under the Fair Trading Act? |