FTC Sues Amazon for Utilizing ‘Deceptive’ Tactics And Underhanded Methods To Sign Up Customers For Prime

The Federal Trade Commission (FTC) has filed a lawsuit against Amazon, accusing the e-commerce giant of enrolling consumers into its Prime service without their consent and making it difficult for them to cancel their subscriptions. The complaint, filed in federal court in Seattle, alleges that Amazon used manipulative and deceptive user-interface designs to trick consumers into signing up for automatically renewing Prime subscriptions.

FTC Chair Lina M. Khan stated that Amazon’s actions not only frustrated users but also cost them significant money. The FTC aims to protect consumers and law-abiding businesses from unfair or deceptive practices in digital markets, including the use of “dark patterns” by companies like Amazon.

Amazon Prime, priced at $139 per year, provides consumers with free two-day shipping and additional perks such as access to Prime Video and music streaming. The FTC claims that Amazon intentionally complicated the cancellation process for Prime subscribers, making it challenging for them to end their memberships. The FTC alleges that Amazon’s goal was to prevent subscribers from cancelling rather than facilitating the cancellation process. The complaint also states that Amazon leadership hindered changes that could have made it easier for users to cancel their subscriptions, prioritizing the company’s financial interests.

During the online checkout process, consumers were presented with numerous opportunities to subscribe to Amazon Prime, while the option to purchase items without subscribing to Prime was less visible. The FTC highlighted instances where the button to complete a transaction did not clearly state that choosing that option would also result in joining Prime for a recurring subscription.

According to the complaint, Amazon internally referred to the cancellation process as “Iliad,” a reference to Homer’s epic poem about the Trojan war, known for its lengthiness. The FTC asserts that users had to navigate through multiple pages, either five on desktop or six on the mobile app, when attempting to cancel their subscriptions.

The FTC has been investigating Amazon Prime’s sign-up and cancellation processes since 2021. The complaint alleges that Amazon deliberately attempted to hinder the investigation on multiple occasions. It is also claimed that Amazon executives did not address the issues until they were made aware of the FTC’s investigation.

In response to the lawsuit, an Amazon spokesperson denied the FTC’s claims, stating that the company makes it clear and simple for customers to sign up for or cancel their Prime membership. Amazon emphasized its commitment to improving the customer experience based on feedback. The company expressed disappointment that the FTC announced the lawsuit without prior notice during ongoing discussions and before engaging with the Commissioners directly. Amazon looks forward to presenting its case in court.

This lawsuit follows Amazon’s recent agreement to pay a $25 million penalty to the FTC and implement privacy safeguards to address violations of the Children’s Online Privacy Protection Act.