Amazon ‘tricked and trapped’ customers into paying for Prime, new FTC suit says
The Federal Trade Commission (FTC) accused the tech giant of using deceptive designs, known as ‘dark patterns,’ to deceive consumers into enrolling and then made it difficult for them to cancel their subscriptions
Amazon was sued Wednesday by Federal Trade Commission for what it called a years-long effort to enroll consumers without consent into its Prime program and making it difficult for them to cancel their subscriptions.
In a complaint filed in the U.S. District Court for the Western District of Washington, the agency accused Amazon of using deceptive designs, known as “dark patterns,” to deceive consumers into enrolling in the program. It said the option to purchase items on Amazon without subscribing to Prime was more difficult in many cases. It also said that consumers were sometimes presented with a button to complete their transactions — which didn’t clearly state it would also enroll them into Prime.
Internally, Amazon called the process “Iliad,” a reference to the ancient Greek poem about lengthy siege of Troy during the Trojan war.
Company leaders slowed or rejected changes that made canceling the subscription easier, the complaint said. It argued those patterns were in violation of the FTC Act and another law called the Restore Online Shoppers’ Confidence Act.
Launched in 2005, Prime has more than 200 million members worldwide who pay $139 a year, or $14.99 a month, for faster shipping and other perks, such as free delivery, returns and the streaming service Prime Video. In the first three months of this year, Amazon reported it made $9.6 billion from subscription, a 17% jump from the same period last year.
In a news release announcing the lawsuit, the FTC said though its complaint is significantly redacted, it contains “a number of allegations” that backs up its accusations against Amazon. It also accused the company of attempting to hinder the agency’s investigation into Prime, which began in 2021, in several instances.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” Khan said in a prepared statement. “These manipulative tactics harm consumers and law-abiding businesses alike.”
Some anti-monopoly groups celebrated the lawsuit shortly after the FTC’s announcement.
The tech giant has faced other lawsuits accusing its Prime cancelation process of being too complicated. Under scrutiny from the agency, the company in March provided consumers with instructions on how to cancel their Prime memberships in a blog post. It did not immediately respond to a request for comment Wednesday.
Amazon has faced heighted regulatory scrutiny in recent years as it moved to expand its e-commerce dominance and dip its toes into other markets, including groceries and health care.
The U.S. and Amazon have traded barbs for years over the investigation. Last year, Amazon accused the FTC of harassing its executives, including founder Jeff Bezos, as the agency sought to get the company’s top brass to testify as part of the probe
In 2021, Amazon asked unsuccessfully that Khan remove herself from separate antitrust investigations into its business, arguing that her public criticism of the company’s market power before she joined the government makes it impossible for her to be impartial. Khan burst onto the antitrust scene in 2017 with her massive scholarly work as a Yale law student, “Amazon’s Antitrust Paradox.
The lawsuit follows another Amazon-related win by the agency just a few weeks ago. Earlier this month, Amazon agreed to pay a $25 million civil penalty to settle allegations it violated a child privacy law for storing kids’ voice and location data recorded by its popular Alexa voice assistant. It also agreed to pay $5.8 million in customer refunds for alleged privacy violations involving its doorbell camera Ring.
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