The Federal Trade Commission (FTC) filed a lawsuit against Amazon on Wednesday, claiming that the online retailer deliberately deceived millions of customers into joining its Prime program and made it challenging to cancel. The FTC alleges that Amazon’s use of “dark patterns,” deceptive design tactics that push users towards a particular option, resulted in Prime program enrolments without consent. The FTC says that Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act. FTC Chair Lina Khan stated that Amazon “tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money.”
Amazon representatives have not yet commented on the lawsuit. Amazon shares fell over 1% in morning trading. The FTC has been investigating Amazon’s Prime sign-up and cancellation processes since March 2021. The agency’s request to have Amazon CEO Andy Jassy and founder Jeff Bezos testify on the company’s Prime practices caused tension between the FTC and Amazon. Amazon argued that the request was unduly burdensome, which the FTC rejected.
Launched in 2005, the Prime program has grown to become one of the most popular subscription services globally, with over 200 million members, and has generated billions of dollars for Amazon. Membership costs $139 a year and includes perks such as free shipping and access to streaming content.
The lawsuit, filed in the U.S. District Court for the Western District of Washington, accuses Amazon’s leadership of slowing or rejecting changes that would have made it easier for users to cancel Prime because those changes “adversely affected Amazon’s bottom line.” The FTC alleges that Amazon made it difficult for consumers to buy items on its site without Prime and that a button that instructed users to complete their transaction did not clearly state that they were also agreeing to join Prime for a recurring subscription.
The FTC also claims that Amazon’s cancellation process is challenging to navigate and designed to deter consumers from ending their Prime subscription. Amazon used an internal term called “Iliad” to describe the process, referencing Homer’s epic poem about the Trojan War, according to a report by Insider.
This is the third lawsuit that the FTC has filed against Amazon in the last month. In late May, Amazon agreed to pay the agency over $30 million to settle cases alleging privacy lapses in its Alexa and Ring units. Amazon stated that it disagreed with the FTC’s claims but settled to move on from the matter.
The FTC’s lawsuit against Amazon for its Prime sign-up practices highlights the importance of transparency and consent in online transactions. The use of dark patterns to deceive consumers into recurring subscriptions without their consent has not only frustrated users but also cost them significant money. As online commerce continues to grow, regulatory bodies such as the FTC will play a crucial role in protecting consumers’ rights and ensuring fair business practices.
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