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The U.S. Federal Trade Commission (FTC) says Amazon.com website engaged in deceptive practices by enrolling millions of consumers into its paid subscription service, Amazon Prime, without their consent. Furthermore, the company made it difficult for them to cancel their participation in this paid service.
Amazon Prime delivery van – illustrative photo. Image credit: Tony Webster via Flickr, CC BY 2.0
This latest action by the FTC against the e-commerce giant follows a series of measures taken by President Joe Biden’s administration to address the market dominance of Big Tech companies and promote competition for consumer protection.
In the lawsuit filed in federal court in Seattle, the FTC alleges that Amazon has knowingly deceived consumers into unknowingly subscribing to Amazon Prime. The agency claims that Amazon has employed manipulative and deceptive user-interface designs, referred to as “dark patterns,” to trick consumers into signing up for automatically renewing Prime subscriptions.
The FTC seeks civil penalties and a permanent injunction to prevent future violations.
Amazon Prime is recognized as the world’s largest subscription program, generating $25 billion in annual revenue. It offers various benefits, including fast and free shipping, discounts, access to a wide range of entertainment content, and more.
Amazon Prime logo on the wall. Image credit: Kārlis Dambrāns via Flickr, CC BY 2.0
All this does not come for free. The U.S.-based Prime members pay $139 every year. Furthermore, their purchases contribute significantly to Amazon’s total sales. Currently, the service has over 200 million members worldwide.
In response to the FTC’s claims, Amazon has disputed the allegations, stating that they are false both in terms of facts and the law.
“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,” commented the representatives of the company.
According to the lawsuit, despite making changes to the cancellation process in April under significant pressure from the FTC, Amazon’s violations are said to persist. It still requires multiple clicks, five on desktop and six on mobile, for consumers to cancel their Amazon.com subscriptions. FTC says this complexity is created on purpose.
Amazon Prime electric delivery vans. Image credit: Philafrenzy via Wikimedia, CC-BY-SA-4.0
The FTC has been conducting an investigation into the sign-up and cancellation procedures for the Prime program since March 2021.
In recent weeks, the FTC has reached settlements with Amazon, including a $5.8 million agreement with its Ring doorbell camera unit and a $25 million settlement related to alleged violations of privacy rights involving Alexa recordings.
Written by Alius Noreika
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