The Federal Trade Commission (FTC) has filed a lawsuit against Amazon, accusing the company of deceiving customers into enrolling in its Prime membership program. The FTC claims that Amazon used manipulative tactics to confuse customers and make it difficult for them to cancel their memberships. The agency’s lawsuit is part of a broader strategy to address the power of Big Tech and penalize companies that use deceptive design techniques to trick customers.
FTC Chair Lina Khan stated that Amazon’s actions cost customers significant money and harm both consumers and law-abiding businesses. Amazon raised the price of Prime in 2022 to $139 a year or $14.99 a month, further exacerbating the situation.
The FTC’s lawsuit highlights the growing tension between Khan’s FTC and Amazon. The agency previously settled two lawsuits against the company regarding data privacy issues. Critics of Amazon have been calling for a broad antitrust lawsuit, which is expected to be filed this year.
Khan, known for her paper on Amazon’s antitrust practices, has argued for a reevaluation of the company’s operations. Amazon attempted to have Khan recused from regulating the company but failed.
The FTC has also pursued lawsuits against other companies, such as Vonage, Epic, and Credit Karma, over their alleged use of deceptive design techniques. Settlements have been reached in some of these cases.
It is worth noting that Amazon founder Jeff Bezos owns The Washington Post, and Patty Stonesifer, an interim CEO, sits on Amazon’s board.
According to the FTC’s complaint, Amazon redesigned its cancellation process before the lawsuit was filed, but it alleges that the company’s primary goal was to make it harder for subscribers to cancel. The process was named “Iliad,” after Homer’s epic about the long and arduous Trojan War.
The lawsuit claims that Amazon tricks customers into enrolling in Prime by presenting options that make it easier to enroll than decline during the checkout process. It also alleges that Amazon does not adequately disclose the price of the monthly auto-renewal feature and uses design elements to make it difficult for customers to see that they will be charged after signing up for a free trial.
The complaint further asserts that these deceptive design practices extend beyond Amazon Prime to other services like Audible, Kindle Unlimited, and Amazon Music.
The FTC also accuses Amazon of acting in bad faith throughout its investigation, deliberately delaying the probe.
In summary, the FTC’s lawsuit against Amazon demonstrates the agency’s determination to address deceptive practices by Big Tech companies. The lawsuit specifically focuses on Amazon’s Prime membership program and claims that the company used manipulative tactics to enroll and retain customers. This legal action is part of a wider effort by the FTC to penalize companies that employ deceptive design techniques to mislead consumers.
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