FTC Sues Amazon Over ‘Manipulative’ Prime Enrollment Policies
Amazon for years “has knowingly duped” millions of consumers into “unknowingly enrolling” in Amazon Prime, in violation of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), alleged the FTC in a partially redacted fraud complaint Wednesday (docket 2:23-cv-00932) in U.S. District Court for Western Washington in Seattle.
Amazon used “manipulative, coercive, or deceptive user-interface designs,” or dark patterns, to trick consumers into enrolling in automatically renewing Prime subscriptions, it said. The company “knowingly complicated” the Prime cancellation process, said the complaint. Under “significant pressure” from the FTC, and aware that its practices are “legally indefensible,” Amazon “substantially revamped” its Prime cancellation process for at least some subscribers shortly before the complaint was filed, the FTC said. But before then, “the primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather to thwart them,” it said. The FTC is seeking a permanent injunction to prevent Amazon’s future violations of the FTC Act and ROSCA, plus monetary and other relief within the court’s “power to grant,” said the complaint.
The agency’s claims are “false on the facts and the law,” the company said in a statement Wednesday. “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.” It’s “concerning” the agency announced its lawsuit “without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialog with the Commissioners themselves before they filed a lawsuit,” Amazon said. “While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court.”
The commission voted 3-0 to authorize staff to file the complaint. The agency acknowledged the complaint is “significantly redacted” but told the court it doesn’t “find the need for ongoing secrecy compelling.”
Amazon’s checkout process offered customers numerous chances to subscribe to Prime at $14.99 per month, the agency noted: “In many cases, the option to purchase items on Amazon without subscribing to Prime was more difficult for consumers to locate.” In some instances, the button for completing a transaction didn’t “clearly state that in choosing that option they were also agreeing to join Prime for a recurring subscription.”
Consumers faced multiple steps in trying to cancel Prime memberships, which included locating a difficult-to-find “cancellation flow,” the agency said. Once located, users were “redirected to multiple pages” with offers to continue the subscription at a discount, to “simply turn off the auto-renew feature, or to decide not to cancel,” the FTC said. “Only after clicking through these pages could consumers finally cancel the service.”
The agency cited media reports describing how Amazon named its cancellation process “Iliad,” an “allusion to Homer’s epic poem set over twenty-four books and nearly 16,000 lines about the decade-long Trojan War.” Amazon launched its Iliad Flow in 2016 and didn’t “substantially change” it in the U.S. until April, the complaint said. The agency accused Amazon of using misdirection at checkout by “presenting asymmetric choices that make it easier to enroll in Prime than not.” Certain versions of Amazon checkout offer consumers “only a less prominent blue link to decline Prime,” the agency said.