In a significant legal development, the Federal Trade Commission (FTC) filed a lawsuit against Amazon on Wednesday (June 21), accusing the e-commerce giant of intentionally deceiving millions of consumers and impeding their efforts to cancel their subscriptions to the popular Prime programme.
The FTC alleges that Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act by employing deceptive design tactics, known as dark patterns, to manipulate users into enrolling in Prime without their consent. These tactics allegedly included misleading design elements intended to steer users towards a specific choice.
The agency claims that Amazon’s actions not only misled customers but also resulted in financial harm.
FTC Chair Lina Khan issued a statement, stating, “Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money.”
Amazon’s spokesperson, Heather Layman, vehemently denied the FTC’s claims, stating, “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.” Layman emphasized Amazon’s commitment to customer feedback and continuous improvement of the customer experience.
The legal dispute between Amazon and the FTC intensified when the agency requested CEO Andy Jassy and founder Jeff Bezos to testify on the Prime programme’s practices. Amazon argued that the request was overly burdensome, but the FTC rejected their objections.
Amazon’s Prime programme, launched in 2005, has achieved immense popularity globally, amassing over 200 million members. Priced at $139 per year, the subscription service offers various benefits, such as free shipping and access to streaming content. The programme has been a significant revenue generator for Amazon, contributing billions of dollars to its bottom line.
The lawsuit, filed in the U.S. District Court for the Western District of Washington, alleges that Amazon deliberately hindered changes to the Prime programme that would have simplified the cancellation process. These changes, according to the FTC, were rejected because they would have negatively impacted Amazon’s financial performance.
The complaint asserts that Amazon made it challenging for consumers to complete purchases on its platform without subscribing to Prime. Additionally, the complaint highlights that the button prompting users to finalize their transactions did not explicitly inform them that they were also consenting to a recurring Prime subscription.
Moreover, the FTC claims that Amazon’s cancellation process was intentionally designed to discourage users from ending their Prime subscriptions. The agency revealed that Amazon internally referred to this process as “Iliad,” alluding to Homer’s epic poem about the Trojan War. The alleged intention was to create obstacles for users, mirroring the epic battle faced by the ancient Greeks.
This marks the third case brought by the FTC against Amazon in the past month. In May, Amazon agreed to pay the FTC over $30 million to settle cases involving privacy breaches in its Alexa and Ring units. While Amazon disagreed with the FTC’s allegations, it decided to settle in order to move forward from the matter.