Expert Spotlight

Neale Mahoney, Professor of Economics at Stanford University and Affiliate with Bates White, testified on behalf of the Federal Trade Commission in Federal Trade Commission v. Amazon.com, Inc. Prof. Mahoney assessed liability and damages in the case, which ended in a landmark settlement, with Amazon agreeing to pay a record $2.5 billion. Here Prof. Mahoney shares a few thoughts on consumer protection issues relating to the case.

Q. What consumer protection issues do large tech companies pose?

A. Companies like Amazon and Meta could pose consumer protection risks several ways—through data misuse, anticompetitive practices, and unfair or deceptive acts or practices, all factors in the evolving digital economy.

The FTC case I worked on related to the last of those risks, unfair or deceptive practices. Consumer protection laws are often grounded in behavioral economics, which studies predictable mistakes by consumers and how companies can design practices to exploit them. Those practices include everything from default options to subscription traps to dark patterns to hidden fees. Research has shown that these practices can harm consumers both directly and by throwing sand in the gears of competition.

With regard to competition, we’ve seen examples such as large companies engaging in self-preferencing, pursuing potentially anticompetitive acquisitions, and using their gatekeeper power to affect the marketplace.

Q. In fact, you just spoke with the New York Times¹ about this issue. Tell us a little about the paper you discussed.

A. Yes, in the paper, which my coauthor and I called “Taking on the Annoyance Economy,” we talk about everyday interactions that turn into ordeals—hidden fees, spam, complicated cancellation processes—that can become not just complex but costly. For example, we referenced my research showing that companies that make it hard to cancel subscriptions can see their revenues increase by up to 200%.

Q. How does an economist translate conduct by one of these companies into a damages calculation?

A. Many firms are aware of consumers’ weaknesses and sometimes reveal in internal communications an intent to exploit the mistakes consumers make. There is rich data about this behavior that allows us to connect the dots to estimate damages. For instance, how many consumers were harmed? What did that cost them? What was the harm per consumer? That can all be extrapolated into a damages figure.

In the FTC-Amazon case I used Amazon’s own consumer surveys and ordinary course of business data to estimate how many consumers unknowingly enrolled in Prime or were unsuccessful in canceling, and how much they paid in Prime fees because of it. That settlement aims to ensure that consumers are fully aware of the terms of their subscriptions and can easily cancel them if they choose not to continue.

Q. What types of questions are you researching that have application to the economic landscape?

A. The core of my academic research is about using data and economic frameworks to understand and draw inferences to better understand consumer behavior. My research has spanned sectors from healthcare—studying insurers, hospitals, nursing homes, and home health providers—to consumer finance and uses techniques from behavioral economics, industrial organization, and econometrics. I hope that, taken together, my research helps provide a foundation for effective consumer protection and market oversight.

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[1] Lora Kelley, “The ‘Annoyance Economy’ Is More than Just Annoying,” New York Times, April 12, 2026, https://www.nytimes.com/2026/04/12/business/annoyance-economy-costs.html?smid=url-share.