FTC Sues Amazon for Forcing Prime Subscription

FTC is suing Amazon for forcing Prime subscription

The Federal Trade Commission (FTC) has filed a lawsuit against Amazon, alleging that the company is using unfair methods to impose its paid Prime subscription on customers. According to the FTC, Amazon has been knowingly tricking consumers into subscribing to Prime through manipulative user interface design, also known as ‘dark patterns’. The agency also accuses Amazon of making it difficult for customers to cancel their Prime subscriptions, with the intention of discouraging cancellations and maximizing profits.

The FTC alleges that Amazon’s tactics to force customers into subscribing to Prime are illegal and constitute unfair competition. They also violate the Restore Online Shoppers’ Confidence Act (ROSCA), which protects consumers from deceptive online practices. Screenshots attached to the lawsuit show that Amazon advertises the Prime subscription as free for 30 days, but fails to clearly disclose the subsequent costs. This lack of transparency interrupts the customer’s ordering process.

The FTC describes Amazon’s cancellation process for Prime subscriptions as a “four-page, six-click, fifteen-option” ordeal. These complicated steps not only cost customers money, but also harm competing businesses. Internally, Amazon refers to its termination procedure as “Illiad”, comparing it to the epic ancient Greek saga about the Trojan War, which consisted of 24 volumes.

Amazon Prime initially started as an annual shipping fee in 2007 in Germany and 2005 in the USA, but has since expanded to include various additional offers. The FTC has criticized Amazon’s behavior during the investigation, alleging that the company has tried to hinder and delay the process. The FTC sent its first release order to Amazon in March 2021, but Amazon reportedly withheld documents and provided false information to obstruct the investigation.

Amazon denies all allegations and claims that the FTC’s claims are factually and legally incorrect. The company expressed dissatisfaction with the lawsuit being filed without warning and before they could enter into a dialogue with FTC officials. Amazon asserts that taking out and canceling Prime subscriptions is clear and simple, and they are constantly working to improve the customer experience. The FTC has urged the court to release hidden information related to the case.

The case is titled Federal Trade Commission v. Amazon.com and is being heard in the United States District Court for Western Washington.

Leave a Reply