Jun 21, 2023 - Technology

FTC sues Amazon for "tricking and trapping" Prime customers

Illustration of a gavel handle made from the Amazon logo

Illustration: Annelise Capossela/Axios

The Federal Trade Commission is suing Amazon, accusing the company of enrolling customers in its Prime program without consent and making it difficult to cancel subscriptions.

Driving the news: The complaint filed in the U.S. District Court in the Western District of Washington charges that Amazon "has knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime."

  • Per a release from the agency, 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 is also accusing Amazon of trying to keep customers from cancelling Prime when they try to do so.

What they're saying: "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 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 other side: "The FTC’s claims are false on the facts and the law," Amazon spokesperson Tim Doyle said in a statement. "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."

  • "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."

The big picture: The suit is Khan's first aggressive move against Amazon in her role, during which she's aggressively gone after tech companies for what she sees as unfair competition strategies and violations of consumer protection laws.

  • Agency watchers also expect Khan to file a competition case against Amazon at some point.

Details: The complaint alleges that Amazon has violated both the FTC Act and the Restore Online Shoppers' Confidence Act. The complaint also says:

  • Customers had trouble finding ways to purchase items without a Prime subscription.
  • Customers were prompted to click buttons that signed them up for Prime without clear consent.
  • Steps to cancel Prime deterred customers from doing so and confused them.
  • Amazon was aware of these issues and did not take any steps to address them until it was aware of an FTC investigation.

Go deeper: Listen to the Axios Today podcast, where host Niala Boodhoo and Ashley Gold share more details about the FTC's lawsuit and Amazon's response.

Editor's note: This story has been updated with Amazon's response.

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