FTC sues Amazon over ‘fraudulent’ Prime signup and cancellation course of

The Federal Trade Commission filed a lawsuit Wednesday Amazonwith allegations that the country’s leading online retailer deliberately tricked millions of consumers into signing up for its flagship Prime program and “sabotaged” their attempts to unsubscribe.

The agency alleges that Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act by using so-called dark patterns, or deceptive design tactics aimed at directing users to a specific choice and tricking consumers into opting out without register their consent with Prime.

“Amazon has tricked people into recurring subscriptions without their consent, which has not only frustrated users but cost them a lot of money,” FTC Chair Lina Khan said in a statement.

Amazon spokeswoman Heather Layman said in a statement that the FTC’s claims were “false as to the facts and the law.”

“The truth is, customers love Prime, and we’re making it clear and easy for our customers to sign up for or cancel their Prime membership,” Layman said. “As with all of 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 develops.”

Photographer: Thorsten Wagner/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

Shares of the company ended slightly lower on Wednesday.

The FTC has been investigating enrollment and cancellation processes for Amazon’s Prime program since March 2021. Tensions between Amazon and the FTC increased when the agency wanted to invite CEO Andy Jassy and founder Jeff Bezos to testify about the company’s Prime practices. Amazon argued the request was unreasonable and onerous, which the FTC denied.

Launched in 2005, the Prime program has grown into one of the most popular subscription services in the world, with more than 200 million members worldwide, and has made billions of dollars for Amazon. Membership costs $139 per year and includes perks like free shipping and access to streaming content.

The lawsuit, filed in U.S. District Court for the Western District of Washington, alleges Amazon leadership is slowing down or rejecting changes that would have made it easier for users to cancel Prime because those changes “negatively impact Amazon’s bottom line.” would have influenced”.

Amazon made it difficult for consumers to purchase items on its site without Prime, and a button prompting users to complete their transaction didn’t make it clear that they also agreed to join Prime for a recurring subscription, the in said the complaint.

The cancellation process is also difficult to navigate and is designed to discourage consumers from canceling their Prime subscription, the FTC claimed. Amazon used an internal term called “Iliad” to describe the process, referring to Homer’s epic poem about the Trojan War, the agency said, citing an Insider report.

The complaint is the third case the FTC has filed against Amazon in the past month. In late May, Amazon agreed to pay the agency more than $30 million to resolve cases involving alleged data breaches in its Alexa and Ring units. The company said it disagreed with the FTC’s allegations but had agreed to move forward on the matter.

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