This article first appeared on GuruFocus.

Amazon.com Inc. (NASDAQ:AMZN) is stepping into a high-stakes courtroom battle that could reshape the future of its Prime subscription business. The Federal Trade Commission has accused the company of using deceptive tactics to push consumers into Prime and then making it unnecessarily complicated to cancel. The case, now unfolding in Seattle before a nine-member jury, is expected to last about four weeks and could expose Amazon to billions in penalties and refunds. Analysts note that with Prime serving as one of Amazon’s most critical loyalty engines, the outcome could carry lasting implications for both growth and profitability.

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At the center of the FTC’s case are claims that Amazon designed a cancellation process so cumbersome it was internally referred to as the Iliad. Nearly 40 million customers may have been impacted, and internal memos dating back to 2017 flagged the problem as an unspoken cancer inside the company. The FTC alleges that Senior Vice Presidents Neil Lindsay and Russell Grandinetti, along with Vice President Jamil Ghani, knowingly rejected proposals to simplify the system to protect revenue. Amazon has pushed back, arguing that its enrollment process is transparent, customers give consent before being billed, and cancellation tools are already straightforward.

Judge John Chun has already ruled that two of the executives are liable and that Amazon failed to disclose Prime’s terms adequately, adding pressure ahead of trial. Under the Restore Online Shoppers’ Confidence Act, penalties could exceed $53,000 for each violation, a figure that analysts warn could lead to multi-billion-dollar exposure. Some see settlement as the likelier path if jurors lean toward the FTC, though Amazon may still argue it lacked clear regulatory guidance. With Prime priced at $139 a year and functioning as the cornerstone of customer retention, investors are watching closely for signs of whether this trial could alter the economics of one of Amazon’s most profitable franchises.