The Federal Trade Commission (FTC) has filed a new lawsuit against Amazon, accusing the e-commerce giant of deliberately deceiving “millions of consumers” into signing up for its paid Prime service and then making it difficult for them to cancel. FTC Chair Lina Khan, known for her aggressive stance against anti-competitive behavior by tech companies, stated that Amazon had ensnared people into recurring subscriptions without their knowledge, resulting in substantial financial losses. According to the New York Times, the FTC claims that Amazon employed “dark patterns,” manipulative and deceptive user-interface designs, to lure customers into enrolling in the largest subscription program in the world. Some customers were unknowingly subscribed by simply clicking a button to complete a normal transaction.
Furthermore, the FTC alleges that Amazon intentionally complicated the cancellation process, referring to it internally as “Iliad,” a nod to Homer’s epic poem about the lengthy Trojan War. The primary objective of Amazon’s Prime cancellation process, the FTC claims, was not to facilitate cancellations but to hinder them. The FTC continues by stating that Amazon’s leadership deliberately obstructed changes that would have made it easier for users to cancel Prime, as these changes would have had a negative impact on Amazon’s finances. In April, under pressure from the FTC, Amazon did make changes to the Prime cancellation process, as reported by Reuters. However, the FTC asserts that violations are still ongoing, and canceling a Prime subscription on Amazon.com still requires five clicks on desktop and six on mobile devices.
Priced at $139 per year in the US, Prime offers customers free and fast shipping, along with various other perks such as access to extensive video, music, and podcast libraries. According to the FTC, Prime has over 200 million members worldwide and generates $25 billion in annual revenue. The FTC began investigating the service in March 2021 and alleges that during the investigation, Amazon engaged in deliberate misconduct with the intention of hindering the investigators. This included providing evasive responses to document requests. Amazon, which has argued that antitrust reforms targeting tech giants would harm Prime, has yet to respond to the complaint. Reuters reports that Amazon’s shares dropped by 0.9% in midday trading. (Read more Amazon Prime stories.)
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