Amazon was sued Wednesday by the Federal Trade Commission over what it called a years-long effort to enroll consumers without consent in its Prime program and make it difficult for them to cancel their memberships.
In a complaint filed in the US District Court for the Western District of Washington, the agency accused Amazon of using deceptive designs, known as “dark patterns”, to trick consumers into enrolling in the program. For.
It said the option to buy items on Amazon without a Prime membership was more difficult in many cases. It also said that consumers were sometimes presented with a button to complete their transaction — which didn’t explicitly state that it would also enroll them in Prime.
Internally, Amazon called the process the “Iliad”, a reference to the ancient Greek poem about the long siege of Troy during the Trojan War.
The complaint says company leaders slowed down or rejected changes, making it easy to cancel memberships. It argued that those patterns were violating the FTC Act and another law called the Restore Online Shopper’s Confidence Act.
Launched in 2005, Prime has more than 200 million members worldwide, who pay $139 a year or $14.99 a month for fast shipping and other perks, such as free delivery, returns, and the streaming service Prime Video. In the first three months of this year, Amazon reported that it earned $9.6 billion from subscriptions, up 17% from the same period last year.
In a news release announcing the lawsuit, the FTC said that although its complaint has been heavily edited, it contains “numerous allegations” that support its allegations against Amazon. It also accused the company of attempting to obstruct the agency’s probe into Prime, set to begin in 2021, on several counts.
“Amazon deceived and tricked people into recurring subscriptions without their consent, not only frustrating users but costing them significant money,” FTC Chair Leena Khan said in a prepared statement. “These manipulative tactics harm consumers and law-abiding businesses alike.”
Over the past two years, the agency has been ramping up its enforcement against deceptive sign-up and cancellation tactics that can manipulate consumers into buying products or services they don’t want.
In December, it said that Epic Games Inc., maker of the popular Fortnite video game, would pay $245 million in customer refunds for deceptive payment methods. In November, telecom company Vonage settled a similar case for $100 million.
The lawsuit also comes as Amazon faces regulatory scrutiny as it moves to expand its e-commerce dominance and dip its toes into other markets, including groceries and health care.
Some antitrust groups celebrated the lawsuit on Wednesday, shortly after the FTC’s announcement. Amazon did not immediately respond to a request for comment on Wednesday, but NetChoice, a tech lobbying group that counts the online retailer as one of its members, issued a statement calling the lawsuit absurd.
“The complaint is that Amazon encourages people to use Amazon Prime — it’s like going after Kroger for promoting its rewards program or Costco for a membership club,” said Carl Szabo, group vice president and general counsel. said in a statement. “It is abundantly clear that the FTC is a runaway agency that needs more oversight. Congress must engage in stronger oversight to rein in the FTC by cutting funding and investigating its ethical lapses and abuses of power.
The industry group also pointed to Khan’s prior criticism of Amazon, accusing her of using the lawsuit “to attack American businesses she doesn’t like.”
Khan, 34, burst onto the antitrust scene in 2017 as a Yale law student with his largely scholarly work, “Amazon’s Antitrust Paradox.”
In 2021, Amazon unsuccessfully said it would recuse itself from separate antitrust investigations into its business, arguing that its public criticism of the company’s market power before joining the government made it impossible for it to be fair. Makes it
America and Amazon have traded barbs for probing.
Last year, Amazon accused the FTC of harassing its executives, including founder Jeff Bezos, as the agency sought to get top company executives to testify as part of the investigation.
The tech giant has also faced other lawsuits alleging that its Prime cancellation process is too complicated. While under investigation by the FTC, the company in March instructed consumers to cancel their Prime memberships in a blog post.
The lawsuit follows another victory by the agency a few weeks ago related to Amazon.
Earlier this month, Amazon agreed to pay a $25 million civil penalty to settle allegations of violating the Child Privacy Act by storing children’s voice and location data recorded by its popular Alexa voice assistant Did.
It also agreed to pay $5.8 million in customer refunds for alleged privacy violations involving its Ring doorbell camera.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – associated Press,