The Federal Trade Commission has filed a lawsuit against Amazon, alleging the ecommerce giant duped millions of consumers into signing up for its Prime subscription program, then made it difficult for them to quit, an allegation the company vigorously denies.
“Specifically, 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 alleged in its complaint.
Amazon, it seems, is getting hit on all sides, facing labor actions on a few fronts, other legal issues, layoffs, a decline in business and accusations that it has become too diversified, losing focus on its core.
The latest action comes weeks after the FTC ordered Amazon to pay $25 million to settle charges that it violated a child online privacy law by keeping voice and geolocation data collected by its Alexa smart device, bypassing parental rights to delete it. Separately, Amazon was fined $5.8 million by the FTC for allegedly allowing employees and contractors to have access to Ring videos, while having lax security measures that allowed hackers to access the video stream.
In the newest case, the FTC charged that Amazon intentionally complicated the process of canceling Prime membership, adding the company’s leadership “slowed or rejected changes that would’ve made it easier for users to cancel Prime because those changes adversely affected Amazon’s bottom line.”
“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 in a release. “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 so-called “dark patterns,” processes intended to either steer consumers toward a Prime subscription or away from canceling, included presenting numerous opportunities for monthly subscription during checkout, and making it difficult to locate purchase options that didn’t include Prime. The checkout button, according to the FTC, would sometimes leave intentionally vague whether shoppers were agreeing to a recurring Prime subscription when purchasing an item.
According to Business Insider, leaked internal Amazon documents revealed that the labyrinthine process for canceling Prime, including directing consumers through multiple questions, clicks and pages, had an internal project code name of “Iliad,” referring to Homer’s epic poem. After the program launched in 2017, Business Insider reports, Prime cancellations dropped by 17%.
Amazon spokesperson Kristin Lunghamer said the FTC’s claims were “false on the facts and the law.”
“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,” Lunghamer said. “As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out.”
Lunghamer added Amazon found it “concerning” that the lawsuit was announced without notice, as Amazon was discussing the issue with FTC staff “to ensure they understand the facts, context and legal issues.”
“While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court,” she said.