Allegations of Unauthorized Enrollment in Amazon Prime Program Through Use of ‘Dark Patterns’

On Wednesday, the Federal Trade Commission filed a lawsuit against Amazon, alleging that the company engaged in a prolonged campaign to enroll customers in its Prime program without their consent and made it challenging for them to terminate their subscriptions.

In a complaint filed in the U.S. District Court for the Western District of Washington, the agency accused Amazon of using fraudulent designs known as “dark patterns” to trick consumers into participating in the program.

That said, the option to buy products on Amazon without subscribing to Prime was more difficult in many cases. It also said consumers were sometimes presented with a button to complete their transaction — which didn’t clearly state that it also signed them up for Prime.

Internally, Amazon called the process “The Iliad,” a reference to the ancient Greek poem about the long siege of Troy during the Trojan War.

Company executives delayed or rejected changes that made it easier to cancel the order, the complaint said. It claimed that these designs violated the FTC Act and another law called the Restore Online Shoppers’ Confidence Act.

Launched in 2005, Prime has more than 200 million members worldwide who pay $139 a year or $14.99 a month for faster shipping and other perks like free shipping, returns and Prime Video streaming. In the first three months of this year, Amazon reported $9.6 billion in orders, a 17 percent increase over the same period last year.

In a press release announcing the lawsuit, the FTC said that its complaint, while significantly redacted, contains “several allegations” that support its allegations against Amazon. It also accused the company in several cases of trying to block the agency’s investigation into Prime, which began in 2021.

“Amazon deceived and trapped people into repeat orders without their consent, which not only frustrated users but also cost them substantial costs,” FTC Chair Lina Khan said in a prepared statement. “These manipulative tactics harm consumers as much as law-abiding businesses.”

Over the past two years, the agency has stepped up its enforcement against fraudulent sign-up and cancellation tactics that can manipulate consumers into buying products or services they don’t want.

In December, it said Epic Games Inc., maker of the popular Fortnite video game, would pay $245 million in customer refunds for fraudulent payment methods. In November, the telecommunications company Vonage settled a similar case for $100 million.

The lawsuit also comes as Amazon faces heightened regulatory scrutiny as it expands its e-commerce dominance and dips its toes into other markets, including grocery and health care.

Some antitrust groups celebrated the lawsuit Wednesday shortly after the FTC’s announcement. Amazon did not immediately respond to a request for comment Wednesday, but NetChoice, a technology lobbying group that counts the online retailer as one of its members, released a statement calling the lawsuit absurd.

“The complaint is that Amazon is encouraging people to use Amazon Prime — this is like going after Kroger for promoting its rewards program or going after Costco for its membership club,” Carl Szabo, the group’s vice president and general counsel, said in a statement. “It is abundantly clear that the FTC is a runaway agency in need of greater oversight. Congress must exercise robust oversight to rein in the FTC by cutting funding and investigating its ethical lapses and abuse of power.

The industry group also pointed to Khan’s past criticism of Amazon, accusing him of using the lawsuit to “attack American companies he doesn’t like.”

Khan, 34, burst into the antitrust world in 2017 with his massive scholarly work, “Amazon’s Antitrust Paradox,” as a Yale law student.

In 2021, Amazon unsuccessfully requested that he recuse himself from separate antitrust investigations into his business operations, arguing that his public criticism of the company’s market power before he joined the board made his impartiality impossible.

The US and Amazon have traded barbs during the investigation.

Last year, Amazon accused the FTC of harassing its executives, including founder Jeff Bezos, when the agency tried to get the company’s top executives to testify as part of the investigation.

The tech giant has also faced other lawsuits accusing its Prime cancellation process of being too complicated. Although the company was under FTC scrutiny, in March the company provided consumers with instructions on how to cancel their Prime memberships in a blog post.

The lawsuit follows the agency’s second Amazon-related win just a few weeks ago.

Earlier this month, Amazon agreed to pay a $25 million civil penalty to settle allegations that it violated the Children’s Privacy Act by storing children’s voice and location data recorded by the popular voice assistant Alexa.

It also agreed to pay $5.8 million in restitution to customers for alleged privacy violations related to its Ring doorbell camera.