Amazon is facing a fresh suit from the Federal Trade Commission, accusing the e-commerce giant of duping millions of consumers into signing up for its mainstay Prime program.
The suit, which was filed on Wednesday, also alleged that Amazon sabotaged attempts of consumers to opt out of the program.
According to the agency, Amazon’s actions violated the FTC Act and the Restore Online Shoppers’ Confidence Act by using so-called dark patterns, or deceptive design tactics meant to steer users toward a specific choice, to push consumers to enroll in Prime without their consent.
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“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina Khan said in a statement.
Amazon spokesperson Heather Layman described the allegation as “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,” Layman said. “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,” Layman said in a statement.
Since March 2021, the FTC has been investigating the sign-up and cancellation procedures of Amazon’s Prime program, per CNBC. The relationship between Amazon and the FTC became strained when the agency requested that CEO Andy Jassy and founder Jeff Bezos testify regarding the practices of the Prime program. Amazon argued that the request was excessive and burdensome, but the FTC rejected their argument.
Amazon’s Prime program, established in 2005, has grown into one of the most popular subscription services worldwide, boasting over 200 million members globally and generating billions of dollars for the company. Membership, priced at $139 per year, provides various benefits such as free shipping and access to streaming content.
In the lawsuit filed in the U.S. District Court for the Western District of Washington, Amazon’s leadership is accused of deliberately hindering or rejecting changes aimed at simplifying the cancellation process for Prime. These changes were considered detrimental to Amazon’s financial performance.
The FTC complaint states that Amazon made it challenging for consumers to make purchases on its platform without Prime. Furthermore, a transaction completion button did not clearly indicate that users would also be enrolling in Prime for a recurring subscription.
The complaint also alleges that the cancellation process was intentionally complicated to dissuade users from ending their Prime membership. The FTC cited a report by Insider, claiming that Amazon internally referred to this process as “Iliad,” referencing Homer’s epic poem about the Trojan War.
This complaint marks the third case brought against Amazon by the FTC within the past month. In late May, Amazon agreed to pay over $30 million to settle cases involving privacy breaches in its Alexa and Ring units. While the company disagreed with the FTC’s claims, it chose to settle in order to move forward and resolve the matter.
On Wednesday, Amazon’s shares closed slightly lower.