FTC is suing Amazon for persuading users to subscribe to Prime
The Federal Trade Commission on Wednesday charged Amazon with illegally inducing consumers to sign up for its Prime service and then preventing them from canceling the subscription, the most aggressive action to date against the company by the chairman of the board. desk, Lina Khan.
The lawsuit, filed in U.S. District Court for the Western District of Washington, alleges that Amazon used design tactics on its website known as “dark patterns” to entice people to subscribe to Prime, the company said. FTC in a release. And when consumers wanted to cancel, they had to go through a byzantine process to do so.
“Amazon tricked and tricked people into recurring subscriptions without their consent, which not only frustrated users but also cost them a lot of money,” Khan said in a statement.
Amazon did not immediately respond to a request for comment.
The lawsuit marked the first time the FTC had taken Amazon to court under the leadership of Ms Khan, who rose to fame with a viral critique of the company and is stepping up scrutiny on the e-commerce giant. Ms Khan has said the power big tech companies have over online trading requires regulators to be much more aggressive and has started taking action against them.
Under Ms. Khan, the FTC continued a lawsuit against Meta, arguing it was cutting off nascent competitors by buying Instagram and WhatsApp, and suing them to block Microsoft’s blockbuster $69 billion deal for video game publisher Activision Blizzard.
Ms. Khan has yet to file the kind of sweeping antitrust suit against Amazon that the company’s critics are demanding. The FTC’s antitrust office has been investigating Amazon’s practices for years, and observers are keeping a close eye on how it will proceed with their findings.
The lawsuit is part of a larger effort by regulators to limit the power of tech giants including Amazon, Apple, Google, Microsoft and Meta, Facebook’s parent company. The Justice Department has filed multiple antitrust cases against Google in recent years.
Amazon recently settled with the FTC that began before Ms Khan’s tenure. The company agreed to pay $25 million last month to settle FTC claims that Amazon’s Alexa Home Assistant devices illegally collected data from children. The agency also settled another privacy case with Amazon’s home security subsidiary Ring.
Amazon Prime has been luring subscribers for years with promises of free expedited shipping, access to a streaming video library, and other perks. By 2021, the company said it had more than 200 million members in the program, costing $139 a year. customers last year $35 billion spent on Amazon subscriptions, primarily Prime memberships, according to the company’s financial disclosures.
On Wednesday, the FTC said Amazon had made it particularly difficult to purchase a product from its store without also subscribing to Prime during checkout. The agency said Amazon was making it difficult for consumers to find the page to cancel the service. Once they found it, Amazon bombarded them with offers designed to change their minds.
The lawsuit follows years of media and activist attention to how difficult it is to cancel Prime. In a 2021 complaint to the Attorney General of the District of Columbia, the Electronic Privacy Information Center, an advocacy group, said Amazon had used manipulative designs to “disguise the intentions of users who intend to cancel their Amazon Prime subscription, to frustrate”.
The FTC recently pledged to crack down on drafts designed to nudge consumers or confuse their attempts to cancel a service.
“While dark patterns can secretly manipulate consumers, these practices are squarely on the FTC’s radar,” the agency said in a 2022 report.
Critics view Prime as central to Amazon’s dominance, as it keeps customers within the company’s storefront by offering them other benefits, such as access to exclusive Amazon streaming such as “Tom Clancy’s Jack Ryan” and “The Lord of the Rings”. : The Rings of Power.”
Amazon has said Prime offers benefits to consumers. In recent years, as the company lobbied against antitrust reforms targeting the tech giants, it regularly told lawmakers and the media that the changes would bog down Prime.