FTC charges Amazon roughly 'crooked' Prime sign-up and revocation method

June 23, 2023: On Wednesday, the Federal Trade Commission charged Amazon, alleging the nation’s dominant online retailer intentionally duped millions of consumers into marking up for its mainstay Prime schedule and “sabotaged” their attempts to cancel.

The agency claims Amazon broke the FTC Act and the Restore Online Shoppers’ Confidence Act by using dark patterns or deceptive design tactics to steer users toward a specific intention to push consumers to enroll in Prime without their consent.

“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.

Representatives from Amazon waited to reply to a request for comment. The firm’s claims were down more than 1% in morning trading.

The FTC has been investigating sign-up and cancellation processes for Amazon’s Prime program since March 2021. Tensions flared between Amazon and the FTC when the agency sought to have CEO Andy Jassy and founder Jeff Bezos testify on the company’s Prime practices. Amazon asserted the request would be unduly and burdensome, which the FTC rejected.

Launched in 2005, the Prime program has grown to become one of the most popular subscription services in the world, with more than 200 million members globally, and it has generated billions of dollars for Amazon. Membership costs $139 annually and includes free shipping and access to streaming content.

The lawsuit filed in the U.S. District Court for the Western area of Washington accuses Amazon leadership of slowing or rejecting modifications that would have made it easier for users to cancel Prime because those changes “adversely affected Amazon’s bottom line.”

Amazon made it difficult for consumers to buy items on its site without Prime, and a button that instructed users to complete their transaction did not clearly state that they also agreed to join Prime for a recurring subscription, the complaint says.

The FTC alleged that the cancellation process is also challenging and designed to deter consumers from ending their Prime subscriptions.

The protest marks the third lawsuit the FTC filed against Amazon last month. In late May, Amazon agreed to pay the agency more than $30 million to settle cases alleging privacy lapses in its Alexa and Ring units. The company disagreed with the FTC’s claims but settled to move on from the matter.