The Federal Trade Commission is suing Amazon for allegedly duping customers into signing up for subscriptions to its Prime service and making it unnecessarily difficult for them to cancel.
“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 Khan, in a statement.
Khan said the Seattle-based company engaged in “manipulative tactics” and employed coercive or deceptive user-interface designs known as “dark patterns” to boost Amazon Prime subscribership.
The regulatory agency claims that the yearlong strategy impacted millions of shoppers.
The suit filed today in U.S. District Court for the Western District of Washington calls for “permanent injunctive relief, restitution, civil penalties, and other equitable relief” for Amazon’s actions. It alleges the online retail and cloud company violated the FTC Act and the Restore Online Shoppers’ Confidence Act.
Amazon offered a strongly worded response to the suit, which it said was filed without previous notice to the company.
“The FTC’s claims are false on the facts and the law. The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership. As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out,” an Amazon spokesperson told GeekWire by email.
“We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialog with the Commissioners themselves before they filed a lawsuit,” the spokesperson continued. “While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court.”
Prime members receive free delivery of certain items sold through Amazon, discounts on some Amazon Grocery items, access to Amazon-produced movies and shows, and other benefits.
Under Khan’s leadership, the FTC has taken a more aggressive stance in pursuing action against tech companies, including Seattle-area tech giants Amazon and Microsoft. This is first time the agency has filed suit against Amazon since Khan became chair. In May, Amazon agreed to pay more than $30 million in separate privacy settlements with the FTC involving its Ring cameras and Alexa voice assistant, despite taking issue with the underlying claims. Last month, the FTC filed a complaint to block Microsoft’s acquisition of video game developer Activision Blizzard.
The suit filed today against Amazon is heavily redacted and includes more than a dozen undisclosed attachments. Seven additional attachments feature screen shots that step through the process of ordering items, being nudged toward enrolling in Prime and a labyrinthian journey to end a membership.
The FTC described the pathways that it claims led to nonconsensual enrollment in Prime, a service that costs $14.99 per month:
- Consumers received multiple opportunities to subscribe while ordering.
- It was often difficult to find the option of purchasing items without subscribing.
- It was not always clear that a button to complete the transaction resulted in subscribing.
- It was difficult to initiate a cancellation, and once the process was started it required clicking through multiple pages that offered alternatives to cancelling.
“The primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather to thwart them,” the suit alleges.
In March 2022, Business Insider reported on the convoluted cancellation process, which it said was code-named “Iliad” in reference to the multi-volume 15,693-line Greek epic poem by Homer.
The lawsuit also states that Amazon employees encouraged company executives to change the practices, and named Neil Lindsay, Russell Grandinetti and Jamil Ghani as leaders in the Prime division.
Read the full complaint below:
