Amazon ‘deceived and trapped’ customers with Prime subscriptions, FTC claims

The US Federal Trade Commission has sued Amazon, accusing it of “sabotaging” its efforts to get customers to sign up for its Prime service without their consent and canceling their memberships.

In the voluminous complaint filed Wednesday, the FTC said Amazon used “manipulative, coercive or deceptive user-interface designs, known as ‘dark patterns,’ to trick consumers into automatically renewing Prime.” may be enrolled in the subscription.”

FTC chair Leena Khan said in a statement: “Amazon tricked people and tricked them into recurring subscriptions without their consent, not only frustrating users but costing them significant money.”

Amazon did not immediately respond to a request for comment.

The lawsuit is the latest salvo against Big Tech companies such as Amazon, Google and Meta that have been launched by Khan and other antitrust regulators in Washington for what they describe as anti-competitive or anti-consumer business practices.

When it was first introduced in 2005, Amazon Prime cost $79 per year and offered customers free two-day shipping on purchases. It has expanded over the years to offer other services, including a Netflix-like digital video library, music, photos and gaming. As its offering has increased, so has its cost, reaching $139 per year in the US. The price of a subscription can vary between consumers, depending on which services they use and how often.

The FTC alleged the issue of “non-consensual enrollment” in Prime as “well-known” within Amazon. Yet, according to the complaint, the company and its leadership “slowed down, avoided, and even made changes to the user experience that they knew would reduce non-consent enrollment because those changes would affect Amazon.” will also negatively impact the bottom line”.

According to the complaint, Prime subscription fees account for $25 billion in Amazon’s annual revenue. Last year, the company’s revenue reached $ 514 billion. According to Insider Intelligence, Amazon Prime users in the US are set to reach 174.9 million this year, which is about 66 percent of the US population.

According to Insider Intelligence, there are 161.7 million Prime subscribers in the US, which is about 60.9 percent of the US population.

The FTC said Amazon had “substantially modified” the Prime cancellation process for some users prior to the lawsuit. But before doing so, according to the complaint, consumers had to “navigate a four-page, six-click, 15-choice cancellation process,” whereas signing up for Prime took only one or two clicks. was needed.

The main goal of the process – which Amazon called the “Iliad” after Homer’s epic poem on the “long, arduous” Trojan War – was to “fail” customers, the regulator alleged.

This is the second FTC challenge against Amazon in as many months. The company agreed in May to pay $25mn to settle a lawsuit brought by the FTC and the US Department of Justice, which accused the company of violating children’s privacy laws.

Regulators accused Amazon of indefinitely storing recordings of children captured by its Alexa voice assistant and “undermining” parents’ deletion requests. The group said it disagrees with the FTC’s claims.

Before being nominated by President Joe Biden to lead the FTC, Khan published an academic paper calling for the break-up of Amazon.

Amazon has long unsuccessfully requested Khan to recuse himself from matters related to the company, citing criticism. When asked about a possible impeachment hearing in Congress in 2021, Khan said he had “none of the financial conflicts or personal relationships that are grounds for recusal under federal ethics laws”.

In the Prime case, the FTC is seeking monetary penalties as well as injunctive relief to prevent harm to customers.