Amazon tricked millions into renewing Prime subscriptions, FTC lawsuit claims
The agency continues its attempts to rein in Amazon with a new filing alleging purposefully confusing Prime options.
The Federal Trade Commission (FTC) announced its latest action against Amazon, this time for allegedly duping millions of consumers into unknowingly automatically renewing their Prime subscriptions. According to a statement released on Wednesday, the FTC is suing the company for allegedly engaging in what are known as manipulative user interfaces known as “dark patterns.” These tactics purposefully designed to delay or prevent Prime subscribers from canceling their plans.
In its official complaint filed on June 21, the FTC contends that consumers encountered a barrage of opportunities to subscribe to Amazon Prime for $14.99 per month. Purchasing products via Amazon without opting to pay for Prime proved more difficult than simply buying items without subscribing. Often, the transaction completion button did not clearly indicate that clicking it would auto-enroll one in a recurring Prime subscription.
[Related: An FTC one-two punch leaves Amazon and Ring with a $30 million fine.]
The FTC alleges Amazon executives were well aware of this ongoing, concerted effort to rope consumers into Prime memberships. Past reports even revealed employees referred to their obfuscation playbook by the project name “Iliad,” a reference to Homer’s 16,000-line epic classical retelling of the Trojan War.
“Amazon and its leadership… slowed, avoided, and even undid user experience changes that they knew would reduce Nonconsensual Enrollment because those changes would also negatively affect Amazon’s bottom line,” reads a portion of the FTC’s complaint. In Wednesday’s announcement, FTC Chair Limerna Khan also stated that, “Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” and called the company’s tactics “manipulative” to both consumers and third-party businesses.
The formal complaint seeks to enact a permanent injunction to prevent Amazon from engaging in the deceptive practices, as well as unspecified financial penalties for “every violation” of the Restore Online Shoppers Confidence Act (ROSCA).
[Related: Why the new FTC chair is causing such a stir.]
In a statement provided to PopSci, an Amazon spokesperson said the FTC’s claims “are false on the facts and the law,” and the company makes it “clear and simple” for customers to either sign-up for or cancel Prime memberships. “We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members,” the spokesperson continued, adding that, “While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court.”
The latest FTC action against Amazon continues the regulators’ ongoing crackdown on the company. Most recently, the organization fined both Amazon and its smart home security subsidiary, Ring, to the tune of $30 million, citing data mismanagement as well as violations to the Children’s Online Privacy Protection Act (COPPA). “Children’s speech patterns and accents differ from those of adults, so the unlawfully retained voice recordings provided Amazon with a valuable database for training the Alexa algorithm to understand children, benefitting its bottom line at the expense of children’s privacy,” the FTC stated at the time.
