FTC sues Amazon for allegedly tricking customers into Prime subscriptions

The Federal Trade Commission (FTC) isn’t done with Amazon despite two recent settlements. The agency has sued Amazon over claims the company fooled customers into signing up for Prime while simultaneously thwarting attempts to cancel. The online retailer allegedly violated the FTC Act and Restore Online Shoppers’ Confidence Act through misleading designs that got users to register for Prime without true consent. Leaders even “slowed or rejected” design changes that would have made it easier to cancel Prime, the FTC argues.

We’ve asked Amazon for comment. In a statement, FTC chair Lina Khan maintains that Amazon “tricked and trapped” customers. This both angered users and cost them “significant money,” she says. The FTC also asserts that Amazon made multiple attempts to “delay and hinder” the investigation. 

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

The FTC under Khan has closely scrutinized Amazon’s practices. Officials have examined the internet giant’s acquisitions of MGM and One Medical as well as privacy issues with Alexa and Ring doorbells. Khan was a notable critic of Big Tech before her nomination as FTC chair, and Amazon even called for her recusal in antitrust cases over claimed bias.

The concept of deceptive design, also known as “dark patterns,” isn’t new. In 2020, the European Union said that many websites made it unnecessarily difficult to reject tracking cookies. However, the lawsuit against Amazon represents a significant test of those patterns’ legality in the US.