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FTC Sues Amazon Over ‘Deceptive’ Signup Efforts

 |  June 21, 2023

The Federal Trade Commission filed a lawsuit against Amazon on Wednesday, claiming that the company misled millions of customers into subscribing for its Prime program and made it difficult for them cancel their membership.

The Wall Street Journal reported that the agency accused Amazon of violating the FTC Act and the Restore Online Shoppers’ Confidence Act by using deceptive design tactics called dark patterns to enroll consumers 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 in a statement.

Amazon representatives did not respond to a comment request. The company’s shares experienced a decrease of more than 1% during morning trading.

Related: Amazon To Compete Against Shopify With “Buy With Prime”

The FTC launched an investigation into Amazon’s Prime program in March 2021, specifically regarding the sign-up and cancellation processes. The agency requested testimony from CEO Andy Jassy and founder Jeff Bezos, which Amazon deemed unduly burdensome. The FTC ultimately rejected Amazon’s argument.

The Prime program was launched in 2005 and has become a widely used subscription service with over 200 million members worldwide. It has been a profitable venture for Amazon, generating billions of dollars. The annual membership costs $139 and offers benefits such as free shipping and access to streaming content.

The lawsuit was filed in the US District Court for the Western District of Washington, alleging that Amazon leadership hindered efforts to simplify the process of canceling Prime, as such changes were deemed detrimental to Amazon’s financial performance.

According to the complaint, Amazon’s purchasing process presented challenges for customers who did not have Prime, and the button indicating completion of the transaction did not make clear that they would also be enrolled in a recurring subscription for Prime.