The Federal Trade Commission is suing Amazon, saying the e-commerce giant tricks people into signing up for its $139 annual Prime membership and makes it hard for them to cancel.
In the lawsuit, the FTC says that Amazon “knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service.” The subscription offers expedited “free” delivery and streaming content.
The FTC asked that the court make Amazon put a stop to its manipulative tactics and pay an unspecified financial penalty.
The Seattle, Wash.-based company has been using “deceptive user-interface designs known as ‘dark patterns’ to trick consumers” into starting a Prime subscription, which automatically renews, according to the lawsuit. For example, the button to enroll in Prime is bright orange, while the button to decline is “comparatively inconspicuous.”
The issue, known as non-consensual enrollment, is well-known at the company, with some employees asking executives to make changes. But instead, some executives undid changes to the website that would have decreased the number of accidental enrollments, according to the lawsuit.
While Amazon recently revamped its Prime canceliation process around April in preparation for the lawsuit coming out, for years it was a difficult process, according to the court filing. The company named the cancellation process “Iliad Flow” in reference to the long and laborious journey of Achilles that’s depicted in Homer’s epic. The heavily redacted complaint describes it as “Prime’s four-page, six-click, fifteen-option Iliad cancellation process.”
Prime subscriptions are essential for the company because users with a subscription spend more money on the platform. In 2021, Amazon said it had more than 200 million Prime subscribers. Last year, Amazon reported about $515 billion in annual revenue and said customers spent $35 billion on Amazon subscriptions, with the majority being Prime, according to its financial report.
The price of Prime was increased to $139 in 2022, up from $79 when it was first introduced in 2005.
The FTC is expected to bring a second lawsuit against Amazon in the coming weeks, according to a new report from Bloomberg. This one will be an antitrust suit focused on the company punishing third-party sellers who don’t use its logistics services.
Previously this year, the FTC filed two other suits against Amazon, one for its Alexa speakers keeping voice data from children, for which it agreed to pay $25 million, and another for staff and contractors being able to spy on Ring doorbell users, for which it agreed to pay $5.8 billion.
