The U.S. Federal Trade Commission (FTC) is suing tech giant Amazon after what it has described as a year-long effort to enrol customers without their consent into its paid Amazon Prime subscription service, and subsequently making it difficult for them to unsubscribe.
Amazon Prime offers fast, free shipping on millions of items, various discounts and access to movies, music and television series, as well as other benefits.
Prime members in the US pay $139 per year and drive much of Amazon’s sales volume. Prime has more than 200 million members worldwide.
On Wednesday, June 21, the Federal Trade Commission filed suit against Amazon.com Inc (AMZN.O) in federal court in Seattle and said it alleged that ‘Amazon has knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime.’
The FTC said Amazon used ‘manipulative, coercive or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions.’
The FTC said Amazon generates $25 billion in revenue from Prime subscriptions annually and that ‘one of Amazon’s primary business goals – and the primary business goal of Prime – is increasing subscriber numbers.’
The lawsuit said that under substantial pressure from the FTC, Amazon changed its cancellation process in April but that ‘violations are ongoing.’
The FTC has been investigating sign-up and cancellation processes for the Prime program since March 2021.
‘Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,’ FTC Chair Lina Khan said in a statement.
Consumers who attempted to cancel Prime were faced with multiple steps to actually accomplish the task of cancelling, according to the complaint.
Amazon dismissed the allegations and said that ‘by design we make it clear and simple to both sign up for or cancel a Prime membership’.
Evelyn Mitchell-Wolf, a senior analyst for the Insider Intelligence market research firm, said the FTC was ‘making an example of Amazon’, according to ABC.
‘But it’s quite common for companies to make it more difficult to cancel an account than it is to create one,’ she added.
