The United States has accused Amazon of deceiving consumers into signing up for auto-renewing Prime subscriptions and making cancellation difficult.
The lawsuit was filed by the Federal Trade Commission (FTC), the nation's consumer rights monitor. It referenced purportedly "manipulative" website layouts.
Amazon dismissed the allegations as "false on the facts and the law." More than 200 million individuals worldwide are Prime subscribers. The service, which includes shipping benefits, access to streaming movies, and more, costs $139 annually or $14.99 per month in the United States and £95 annually in the United Kingdom.
The FTC alleged that Amazon used website layouts that persuade consumers to sign up for Prime and have their subscriptions automatically renewed as they made purchases. The company attempted to make it difficult for users to opt out of auto-enrollment because those changes would also negatively affect Amazon's bottom line, according to the complaint filed in Seattle federal court.
In addition, the FTC stated that Amazon required customers wishing to cancel to go through a "cumbersome four-page, six-click, fifteen-option" process, internally referred to as "Iliad" in reference to the Greek epic about the long, arduous Trojan War.
Even though Amazon changed the cancellation procedure shortly before the lawsuit was filed, the FTC claimed that the company's actions violated consumer protection laws.
Lina Khan, chairwoman of the Federal Trade Commission, asserted that Amazon deceived and ensnared consumers into recurring subscriptions without their consent, frustrating users and costing them a substantial amount of money. The FTC is seeking a court order and unspecified monetary penalties to compel Amazon to alter its business practices.
Amazon stated it was in the midst of discussions with the agency when the lawsuit was submitted without its knowledge. According to the corporation, the fact of the matter is that consumers are quite satisfied with Prime, and by design, It is made simple for them to either join up for or terminate their Prime membership.
The FTC has repeatedly warned online businesses against manipulating consumers with dark patterns. Since 2021, it has been investigating Amazon's Prime program. It was asserted that the company had attempted to delay the investigation on multiple occasions, including by refusing to provide documents on time.
Senior analyst at Insider Intelligence Evelyn Mitchell-Wolf stated that the FTC was "making an example of Amazon." Ms. Khan created a name for herself by criticizing the United States competition policies in relation to Amazon before President Joe Biden selected her to her current position.
She has pledged to take a more robust approach to policing internet purchasing and the influence of America's digital companies. The Federal Trade Commission has taken three separate actions in recent weeks concerning Amazon, including this case.
Last month, the corporation reached an agreement to pay $25 million to settle allegations that it had broken rules regarding the privacy of children by retaining recordings that children had made using Alexa.
It reached an agreement to pay an additional $5.8 million to settle accusations that Ring, a doorbell business that Amazon purchased in 2018, had breached privacy rules by allowing its employees full access to customer films and by failing to install precautions against hackers. The claims said that Ring had given employees unrestricted access to customer footage.
