FTC Accuses Amazon of Deceptive Practices to Obtain Prime Subscriptions

Amazon is facing further legal action from the Federal Trade Commission (FTC) despite recently settling two cases. The FTC has filed a lawsuit against the online retailer, accusing it of deceiving customers into signing up for Prime and making it difficult for them to cancel. The FTC claims that Amazon violated the FTC Act and Restore Online Shoppers’ Confidence Act by using misleading designs to obtain Prime registrations without genuine consent. The agency also alleges that Amazon deliberately impeded efforts to simplify the cancellation process by delaying or rejecting design changes.

We’ve reached out to Amazon for comment. FTC Chairwoman Lina Khan claims in a statement that Amazon “deceived and trapped” customers. This both angered users and cost them “significant money,” he says. The FTC also alleges that Amazon made several attempts to “delay and obstruct” the investigation.

As CNBC points out, the FTC has been investigating Amazon Prime’s sign-up and cancellation systems since March 2021. The investigation deepened in 2022 after Insider said it obtained internal documents that claimed to show Amazon was aware of customer objections as early as 2017. Buyers were encouraged. to sign up for a 30-day trial with one click during checkout, but had to wade through several pages to cancel before the trial ended. Amazon even used the term “Iliad” to describe the cancellation process, referring to the length of Homer’s epic poem.

The FTC, led by Khan, has been closely scrutinizing Amazon’s practices. Authorities have been investigating acquisitions by Internet giant MGM and One Medical, as well as privacy issues with doorbells Alexa and Ring. Khan was a prominent critic of Big Tech before being named FTC chairman, and Amazon even asked him to recuse himself from antitrust cases for alleged bias.

The concept of deceptive design, also known as “dark pattern”, is not new. In 2020, the European Union said that many websites made it unnecessarily difficult to reject tracking cookies. However, the lawsuit against Amazon is a significant test of the legality of these models in the United States.