The United States Federal Trade Commission has filed a lawsuit against Amazon.com, alleging that the e-commerce giant enrolled millions of consumers into its paid subscription service, Amazon Prime, without their consent and made it difficult for them to cancel. The FTC claims that Amazon employed manipulative and deceptive user-interface designs, known as “dark patterns,” to trick consumers into automatically renewing Prime subscriptions.
In response, Amazon issued a statement refuting the FTC’s claims, stating that they are false both factually and legally. This lawsuit is part of a series of actions taken by President Joe Biden’s administration to address the dominant market power of Big Tech companies and promote competition for consumer protection.
According to the FTC, Amazon Prime is the world’s largest subscription program, generating $25 billion in annual revenue. It offers various benefits, including fast and free shipping, discounts, access to entertainment content, and more. The FTC asserts that increasing subscriber numbers is one of Amazon’s primary business goals.
While Amazon made changes to its cancellation process under pressure from the FTC, the agency alleges that violations are ongoing, as it still requires several clicks for consumers to cancel their Prime membership. The FTC is seeking civil penalties and a permanent injunction to prevent future violations.
The FTC’s investigation into Amazon’s Prime sign-up and cancellation processes began in March 2021. FTC Chair Lina Khan stated that Amazon had tricked and trapped consumers into recurring subscriptions without their consent, causing frustration and significant financial losses.
According to the FTC complaint, consumers faced a complex and convoluted process when attempting to cancel Prime, with multiple steps to navigate. The complaint highlights Amazon’s use of the term “Iliad Flow” to describe the lengthy cancellation process, drawing a reference to Homer’s epic poem depicting the extended Trojan War.
As a result of these developments, Amazon’s shares experienced a 0.9 percent decline in midday trading.
