FTC sues Amazon for using ‘deceptive’ tactics to sign up customers for Prime
Reading Time: 2 minutesThe Federal Trade Commission sued Amazon on Wednesday, alleging the retailer worked for years to enroll consumers into its Prime service without their consent, while knowingly making it difficult for them to cancel their subscriptions.
The complaint, which was filed in federal court in Seattle, alleges that Amazon used ‘manipulative, coercive, or deceptive user-interface designs’ to trick consumers into enrolling in automatically renewing Prime subscriptions.
‘Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,’ said FTC Chair Lina M. Khan in a press release. ‘These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets.’
Amazon Prime costs $139 per year and gives consumers access to free two-day shipping, along with additional perks like access to Prime Video and music streaming.
The FTC says Amazon knowingly complicated the cancellation process for Prime subscribers who were looking to end their membership, alleging that the main goal of the cancellation process is not to allow subscribers to cancel their memberships, but to stop them from doing so. The FTC also says Amazon leadership slowed or rejected changes that would have made it easier for users to cancel their subscriptions ‘because those changes adversely affected Amazon’s bottom line.’
‘During Amazon’s online checkout process, consumers were faced with numerous opportunities to subscribe to Amazon Prime at $14.99/month,’ the FTC wrote in the press release. ‘In many cases, the option to purchase items on Amazon without subscribing to Prime was more difficult for consumers to locate. In some cases, the button presented to consumers to complete their transaction did not clearly state that in choosing that option they were also agreeing to join Prime for a recurring subscription.’
The complaint says Amazon internally used the term ‘Iliad’ to describe the service’s cancelation process, which is a reference to Homer’s lengthy epic poem about the Trojan war. The FTC also says users have to click through five pages on desktop or six on the mobile app when trying to cancel their subscriptions.
The FTC has been investigating Amazon Prime’s sign-up and cancellation processes since 2021. In its complaint, the FTC alleges that Amazon attempted to ‘delay and hinder’ its investigation in multiple instances. The Commission also alleges that Amazon executives failed to address the issues until they were aware of the FTC investigation.
The news comes a few weeks after Amazon agreed to pay the FTC a $25 million penalty as well as ‘overhaul its deletion practices and implement stringent privacy safeguards’ to avoid charges of violating the Children’s Online Privacy Protection Act to spruce up its AI.
Ref: techcrunch
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