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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The US Federal Trade Commission has sued ride-hailing app Uber, alleging that it made false or misleading claims about its subscription service. This move is seen as a clear sign that Donald Trump’s administration is taking a tough stance against Big Tech companies.
According to the complaint filed in a California court on Monday, the regulator claimed that Uber One, the company’s subscription service, did not deliver the promised savings and was difficult to cancel, despite the company’s claims that it could be canceled anytime.
FTC chair Andrew Ferguson stated, “Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel. Uber not only deceived consumers about their subscriptions but also made it unreasonably difficult for customers to cancel.”
This lawsuit is part of a series of legal actions taken by successive US administrations against large technology companies. It indicates that the Trump administration will continue to crack down on these companies, despite recent efforts made by tech executives to appease the government.
Uber has denied the FTC’s allegations, stating that its sign-up and cancellation processes are clear, simple, and comply with the law. It’s worth noting that both Uber and its CEO, Dara Khosrowshahi, donated $1 million each to Trump’s inauguration earlier this year.
Other tech giants such as Apple, Amazon, Meta, and Google have also faced antitrust challenges from the FTC and the Department of Justice. Some of these cases have already gone to trial.
Despite efforts by tech executives to gain favor with the White House, the FTC, under the leadership of Andrew Ferguson, has maintained a tough stance on antitrust actions. Ferguson, who was appointed by Trump, has accused Big Tech of censorship and signaled that he will continue the crackdown on the industry initiated by his predecessor, Lina Khan.
In court filings, lawyers for the FTC alleged that Uber falsely claimed users would save approximately $25 a month through the $9.99 service, without factoring in the actual cost of the subscription. They also mentioned that Uber made it challenging to cancel the service, requiring users to navigate through multiple screens and actions.
Uber responded by stating, “Uber does not sign up or charge consumers without their consent, and cancellations can now be done anytime in-app and take most people 20 seconds or less.”
It’s worth noting that the FTC, during Biden’s administration, also brought a lawsuit against Amazon over its Prime subscription service. This case is scheduled to be heard later this year in Seattle.
This is not the first time Uber has faced legal action from the FTC. During Trump’s first term, the ride-hailing app was sued over mishandling personal data and exaggerating potential earnings for drivers. Uber settled both cases and paid a $20 million settlement to provide refunds to affected drivers.
