FTC accuses Amazon of duping Prime customers

Transcript

NIALA: Good morning! Welcome to Axios Today!

It’s Thursday, June 22nd.

I’m Niala Boodhoo.

Today on the show: new protections for pregnant workers. Plus, wheelchair users fight for easier air travel.

But first, the FTC goes after Amazon… that’s today’s One Big Thing.

NIALA: The Federal Trade Commission is suing Amazon for allegedly tricking millions of customers into signing up for Amazon Prime and making it harder for people to cancel prime subscriptions. The lawsuit was filed yesterday in the U.S. District Court in the western District of Washington state. Axios’ Ashley Gold is here with the big picture.

Ashley, the FTC said in its complaint that Amazon used manipulative, coercive, or deceptive user interface designs known as dark patterns to trick customers into prime. What exactly are those dark patterns?

ASHLEY GOLD: That is sort of a fancy or, you know, dark word for what we see on tech platforms every day, which is when you wanna do something that involves you stopping giving the tech company money or canceling a membership, they wanna make it difficult. They wanna give you incentive to keep paying for the service they're giving you in those little ways. Tech companies make it harder and they make you click through more pages or jump through more hoops, that would be considered a dark pattern.

NIALA: What are the other details of this lawsuit?

ASHLEY: The FTC is alleging that Amazon is making it so you have more incentive to click on the link that then sides you up to be a prime member without you really knowing that that's what you're doing. Or maybe it clicks you through to a bunch of windows and then all of a sudden you're a prime member and you didn't even realize that's what was happening. They're also very frustrated that if people wanna cancel their prime memberships, they have to go through a multi-step process to do so. There's just no simple cancel here button.

NIALA: What has Amazon said in response to this?

ASHLEY: Amazon said that the FTCs claims are false on both the facts and what is allowed by law. They're pointing to the popularity of the Prime membership, how much people love it. They claim that they make it very easy and simple for customers to sign up for Prime and to cancel it, and that at the end of the day, their investment and their priority is people that they serve using the Amazon platform and that the FTC is just going after a competitive company, um, for their, for its success. Amazon was surprised to see this lawsuit publicly announced yesterday. They thought they would have a little more time to go back and forth with the agency before everyone found out.

NIALA: Last month, Amazon agreed to pay more than $30 million to settle two FTC privacy complaints. That was over Alexa and Ring products. Ashley, what are we expecting from this lawsuit?

ASHLEY: Out of this lawsuit, we can expect the Federal Trade Commission to ask Amazon to stop certain practices. Amazon may or may not agree to changes based on what the FTC is asking for. They may come to a settlement, which Amazon would pay to settle these allegations without any sort of, you know, acknowledgement that there's been any wrongdoing or it could go to a trial. We just have to see what happens.

NIALA: Ashley, this is FTC chair Lina Khan's first aggressive move towards Amazon, but she has gone after other tech companies. What does all of this mean for the tech industry more broadly right now when it comes to the FTC?

ASHLEY: They need to be on high alert. Lina Khan isn't always successful when she goes after tech companies. She's had a mixed track record with what she's actually been able to accomplish. But to her credit, she really goes for things. She goes for lawsuits, she goes for settlements. She takes companies to court.

So if you're a tech company that is really using up a lot of consumer data to keep your subscriptions up or to sell ads, you have to really be careful with how you do that because the FTC is watching you. Additionally, we're expecting the Federal Trade Commission to bring an antitrust competition case against Amazon at some point, and that hasn't dropped yet.

NIALA: Ashley Gold covers tech and policy for Axios in D.C. Thanks, Ashley.

ASHLEY: Thank you.

NIALA: Accessibility advocates are fighting for new rules that would make flying easier for passengers who need extra assistance — especially wheelchair users. Axios’ Alex Fitzpatrick has more:

ALEX FITZPATRICK: Wheelchair users can roll up into a bus on a train, a baseball game. Should airplanes be any different? Right now, if you are a wheelchair user, getting on an airplane, you're not allowed to sit in your own wheelchair during a flight. Uh, you're often wheeled onto the plane where flight attendants can, help you into a, a different seat.

And, you know, people are hurt during that process sometimes. And then your wheelchair,, sometimes it's sort in the cabin if there's room, but more often than not, it's put in the luggage bay, where they can be damaged. in January, 2023. Three, 1.6 wheelchairs or scooters, mobility scooters were damaged for every 100 that were put on a plane.

That's a pretty high number. and it's just an awful struggle to get a new chair, to get your chair fixed. So what wheelchair users want, first and foremost is to just be able to sit in their own wheelchair on a plane.

There are design challenges there, there are some airlines that are working on seats that will be wheelchair compatible. And it seems like we'll get there eventually, but it's not gonna happen tomorrow. This debate is coming up now because Congress needs to re-up the FAA’s authorization by the end of September.

The current FAA authorization bills are gonna go through Congress. they're in the process of working their way through the Senate and the House. Now, as written, they have some improvements for people with wheelchairs and other people who need extra assistance. They don't make it so that airlines need to let people bring their own wheelchairs into planes, but advocates are optimistic that we're moving in that direction.

That’s Axios What’s Next editor Alex Fitzpatrick.

Coming up: a new federal law aims to protect pregnant workers.

NIALA: Welcome back to Axios Today. I'm Niala Bodhoo. Next week a new federal law protecting the rights of pregnant workers will go into effect. And it has the potential to increase women's participation in the labor force for years to come. This breakthrough legislation comes almost a year after the Supreme Court cut back on the rights of pregnant women with its Dobbs decision that rolled back Roe v. Wade. Axios' Emily Pack has been reporting on this. Hi Emily.

EMILY PECK: Hey Niala.

NIALA: We started the week talking about how rare maternity leave in the US is compared to other countries, Emily — what are some other things pregnant workers struggle with in the workplace that prompted this legislation?

EMILY: So I've been watching this for, since almost a decade it seems. What pregnant workers struggled with was being pregnant and working at the same time. LEmployers really push back on this idea of giving pregnant workers any kind of accommodation, especially in low wage jobs. So say you're a warehouse worker and you're pregnant, and your doctor says you can lift only up to 50 pounds. You would go to your manager and he would say, ‘oh, that's too bad. I guess you have to go out on unpaid leave. See ya.’ Meanwhile, that same company would give an accommodation to say a worker who was injured in the workplace, they would get like a light duty or a desk job or something like that. And this was repeated over and over again in all kinds of industries. Pregnant workers who wear uniforms, you need accommodations for the uniforms. I once wrote about a police officer and she just needed like a different size belt to keep her gun. And she had difficulty they wouldn't issue one to her and it was like a whole thing. Cashiers who needed like just to sit down, you know, or extra bathroom breaks, things like that. They weren't given these kinds of accommodations, and what it wound up doing was. Pushing a lot of pregnant women out of the labor force at a time when they could really use the money. And it basically makes a whole class of workers unattached from the labor force. 2.8 million women a year are pregnant on the job. That's 70% of all pregnant women in the US from an analysis from the National Partnership for Women and Families. So that's millions of women every year getting pregnant who will need some kind of protection in the workplace. And the US is facing somewhat of a labor shortage and women's labor force participation has really stalled out compared to other countries.

NIALA: So how does this legislation address those concerns?

EMILY: So this legislation, the Pregnant Workers Fairness Act, which goes into effect next week, basically says employers at companies with more than 15 workers have to talk to pregnant workers and figure out accommodations for them. It's modeled on the Americans with Disabilities Act, which works in a similar way, where there's like a negotiation back and forth between employer and employee. There is an out for an employer, they can claim like a hardship and say like, ‘I, I can't do that. You know, I'm sorry, would be too bad for our, our business’. But there has to be some kind of back and forth and negotiation to figure out these reasonable accommodations.

NIALA: Emily, how does this law relate to everything that's happened recently in terms of the rollback on abortion rights across America?

EMILY: The Pregnant Workers' Fairness Act says employers have to provide accommodation for pregnant workers so that could include a pregnant worker who is seeking an abortion or some kind of reproductive care that's limited in some states now by Dobbs. Under this law, theoretically, an employer would have to give an accommodation for that. It's kind of unclear how that's gonna play out in states where abortion's illegal. It's gonna depend on how regulators sort of write the rules for this law. It's very much TBD.

NIALA: Emily Peck is an Axios business reporter. Thanks, Emily.

EMILY: Thank you.

NIALA: That’s all we’ve got for you today – remember we’d love a rating and review on apple podcasts…it helps other listeners find us. And we always read your feedback.

I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.