FTC sues Amazon for alleged Prime deception

The Federal Trade Commission (FTC) is taking action against Amazon for what it says are efforts to dupe consumers into joining its Prime membership program.

In a complaint filed Wednesday, June 21, 2023, the FTC charges that Amazon has engaged in a “years-long effort” to enroll consumers into its Prime program without their consent, while knowingly making it difficult for them to cancel Prime subscriptions.

Specifically, the FTC alleges Amazon used deceptive user interface designs known as “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions. The FTC says Amazon also knowingly complicated the cancellation process for Prime subscribers who sought to end their membership.

The primary purpose of its Prime cancellation process, according to the FTC compliant, was not to enable subscribers to cancel, but to stop them. Amazon leadership slowed or rejected changes that would have made it easier for users to cancel Prime because those changes adversely affected Amazon’s bottom line, says the FTC. 

During Amazon’s online checkout process, the FTC says consumers were offered numerous opportunities to subscribe to Amazon Prime at $14.99/month. In many cases, the option to purchase items on Amazon without subscribing to Prime was more difficult for consumers to locate, according to the FTC.

The FTC also charges that Amazon put in place a cancellation process designed to deter consumers from successfully unsubscribing from Prime. Consumers who attempted to cancel Prime were faced with multiple steps to accomplish the task of cancelling, according to the complaint. Consumers had to first locate the cancellation flow, which Amazon made difficult.

Once they located the cancellation flow, they were redirected to multiple pages that presented several offers to continue the subscription at a discounted price, to simply turn off the auto-renew feature, or to decide not to cancel. Only after clicking through these pages could consumers finally cancel the service.

The complaint further alleges that Amazon was aware of consumers being non-consensually enrolled, and that the company’s executives failed to take any meaningful steps to address the issues until they were aware of the FTC investigation. In the complaint, the FTC also alleges that Amazon attempted to delay and hinder its investigation in multiple instances.

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said FTC chair Lina M. Khan. “These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets.”

An Amazon spokesperson responded to the suit in emailed commentary to Chain Store Age.

“The FTC’s claims are false on the facts and the law," said the spokesperson. "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. 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. We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialog with the Commissioners themselves before they filed a lawsuit. While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court.” 

As far back as 2019, the FTC placed Amazon under increased scrutiny for alleged antitrust issues. The FTC vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Western District of Washington.