FTC Files Lawsuit Against Amazon Over Alleged Deceptive Tactics Targeting Prime Customers
The Federal Trade Commission (FTC) has taken legal action against Amazon, accusing the company of engaging in deceptive practices to enroll customers into automatically renewing Prime subscriptions and creating obstacles for cancellation. In a lawsuit filed in federal court in Seattle, the FTC claimed that Amazon utilized “manipulative” website designs to coerce customers into agreeing to Prime enrollment during the purchase process. The agency also alleged that Amazon implemented a cumbersome and complex cancellation procedure, referred to internally as “Iliad,” making it arduous for users to opt out of the subscription. While Amazon denied the charges, stating they were baseless, the FTC contended that these tactics violated consumer protection laws. With over 200 million global subscribers, Prime offers various benefits, including shipping perks and streaming services, at a cost of $139 annually or $14.99 monthly in the US and £95 per year in the UK.
The FTC’s lawsuit aims to secure a court order mandating changes in Amazon’s practices and seeks financial penalties of an undisclosed amount. FTC Chair Lina Khan condemned Amazon for allegedly trapping and tricking users into recurring subscriptions without their consent, leading to significant financial burdens. The agency has consistently warned against the use of “dark patterns” by online companies to manipulate customers. The FTC had been investigating Amazon’s Prime program since 2021 and accused the company of obstructing the probe by delaying document deliveries. Analyst Evelyn Mitchell-Wolf noted that the FTC’s actions against Amazon serve as a deterrent to other companies, as many tend to make account cancellation more challenging than account creation.