The Federal Trade Commission (FTC) has sued Amazon for misleading users about cancelling Prime subscriptions.
The FTC alleged that the e-commerce giant “duped millions of consumers into unknowingly enrolling in Amazon Prime” and then “sabotaged” their attempts to cancel the subscription in violation of the Restore Online Shoppers’ Confidence Act.
The FTC has been investigating Prime subscriptions since 2021. The agency alleges that Amazon executives knew the cancellation process was so difficult that they dubbed it the “Iliad flow” a reference to Homer’s epic about the “long, arduous Trojan War.”
Amazon users attempting to cancel their Prime subscription had to click through several pages in order to confirm the cancellation, and the company used tactics like emphasizing options to divert from the “flow” or warning signs next to the confirmation buttons in an attempt to stop people from cancelling, the complaint alleges.
But Amazon also made it difficult for customers to avoid enrolling in Prime, obscuring the option to opt out of Prime during checkout or highlighting free shipment options included in Prime while hiding the subscription price, prosecutors said.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said FTC Chair Lina M. Khan. “These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets.”
The View From Amazon
An Amazon spokesperson said that the FTC’s “claims are false on the facts and the law” and accused the agency of announcing the lawsuit without notifying Amazon.
“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,” the spokesperson said in a statement to Semafor.
“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 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,” the spokesperson said, adding that it while this was “extremely disappointing, we look forward to proving our case in court.”
Prime was launched in 2005 and is now one of the most popular subscription add-ons in the world, accounting for 200 million users, CNBC reports.
For $139 a year, customers receive free shipping and gain access to other Amazon perks like streaming on Prime Video.
This is third FTC lawsuit against Amazon this month. The company most recently reached a $30 million settlement with the FTC over a case involving privacy concerns with Alexa and Ring systems.
On Tuesday, Sen. Bernie Sanders launched an investigation into Amazon's "disastrous safety record."