FTC Files Lawsuit Against Amazon Alleging Deceptive Prime Sign-up and Cancellation Process

The Federal Trade Commission (FTC) filed a lawsuit against Amazon on Wednesday, accusing the popular online retailer of engaging in intentional deception and “sabotaging” consumers’ attempts to cancel their subscriptions to its Prime program.

According to the FTC, Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act by employing deceptive design strategies known as “dark patterns.” These tactics were allegedly used to manipulate users into enrolling in Prime without their informed consent and impeding their efforts to cancel the subscription.

FTC Chair Lina Khan stated “Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money.”

The FTC initiated an investigation into Amazon’s sign-up and cancellation procedures for the Prime program in March 2021. The conflict escalated between Amazon and the FTC when the agency requested the testimonies of CEO Andy Jassy and founder Jeff Bezos regarding the company’s Prime practices. Amazon objected to the request, arguing that it would be overly burdensome, but the FTC dismissed their objection.

Since its launch in 2005, Amazon’s Prime program has experienced tremendous growth, attracting over 200 million members worldwide and generating billions of dollars for the company. Priced at $139 per year, the subscription service offers various benefits such as free shipping and access to streaming content.

The lawsuit, filed in the U.S. District Court for the Western District of Washington, alleges that Amazon’s leadership deliberately impeded efforts to make the cancellation of Prime memberships easier. The complaint states that the “company’s bottom line was adversely affected” by proposed changes that would have simplified the cancellation process.

The complaint further claims that Amazon employed tactics to make it challenging for consumers to make purchases on the platform without subscribing to Prime. Additionally, a button prompting users to complete their transaction allegedly failed to clearly disclose that it would also enroll them in a recurring subscription to Prime.

The Federal Trade Commission (FTC) accused Amazon of intentionally making the cancellation process for its Prime subscription difficult and discouraging for consumers. The agency claimed that Amazon employed tactics to deter users from ending their Prime membership and referred to the process as “Iliad,” drawing a reference to Homer’s epic poem about the Trojan War, according to a report by Insider.

This complaint against Amazon is the third lawsuit filed by the FTC in the past month. In late May, Amazon agreed to pay the FTC over $30 million to resolve cases related to privacy concerns in its Alexa and Ring units. While Amazon stated that it disagreed with the FTC’s allegations, it chose to settle the cases in order to put the matter behind them.