Amazon Faces Lawsuit by FTC for Allegedly Misleading Customers into Prime Subscriptions
Amazon is facing legal action from the Federal Trade Commission (FTC) for allegedly deceiving customers into signing up for Prime memberships while obstructing cancellation attempts. According to the FTC, Amazon violated the FTC Act and Restore Online Shoppers’ Confidence Act by utilizing misleading designs that coerced users into registering for Prime without genuine consent. Furthermore, the agency claims that Amazon deliberately impeded the implementation of design changes that would have simplified the cancellation process.
The FTC Chair, Lina Khan, asserts that Amazon “tricked and trapped” customers, resulting in significant financial losses. Khan also accuses Amazon of attempting to hinder and delay the investigation. CNBC reports that the FTC began investigating Amazon’s Prime sign-up and cancellation systems in March 2021, with the investigation intensifying in 2022 following the disclosure of internal documents by Insider. These documents purportedly revealed Amazon’s awareness of customer complaints as early as 2017. During checkout, shoppers were enticed to opt for a 30-day trial with a single click, but canceling the service before the trial ended required navigating through multiple pages. Amazon even referred to the cancellation process as an “Iliad,” drawing a parallel to the epic poem’s length.
Under Chair Lina Khan’s leadership, the FTC has closely scrutinized Amazon’s practices. The agency has examined Amazon’s acquisitions of MGM and One Medical, as well as privacy concerns related to Alexa and Ring doorbells. Khan, known for her criticism of Big Tech, faced opposition from Amazon, which requested her recusal from antitrust cases, citing alleged bias.
The lawsuit against Amazon raises important questions about the legality of deceptive design, commonly known as “dark patterns,” in the United States. While the concept has been addressed by the European Union, which highlighted websites making it unnecessarily challenging to reject tracking cookies in 2020, this case represents a significant test of the legality surrounding these patterns in the US.
Frequently Asked Questions (FAQs) about deceptive design
What is the Federal Trade Commission (FTC) suing Amazon for?
The FTC is suing Amazon for allegedly tricking customers into signing up for Prime subscriptions while impeding their ability to cancel.
What laws did Amazon allegedly violate according to the FTC?
According to the FTC, Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act through misleading designs that resulted in users registering for Prime without true consent.
What claims does the FTC make against Amazon?
The FTC claims that Amazon “tricked and trapped” customers, causing them to lose significant money. Additionally, the FTC accuses Amazon of intentionally delaying and hindering the investigation.
What specific practices of Amazon are being investigated?
The FTC has been investigating Amazon’s Prime sign-up and cancellation systems, particularly the use of deceptive designs and the complexity of the cancellation process.
Who is Lina Khan and what is her role in this case?
Lina Khan is the Chair of the FTC. She maintains that Amazon deceived customers and is leading the legal action against the company.
What is the significance of this case?
This case represents a major test of the legality of deceptive design, or “dark patterns,” in the United States. It raises questions about consumer protection and the accountability of online retailers.
What other issues has the FTC scrutinized regarding Amazon?
Under Lina Khan’s leadership, the FTC has examined various aspects of Amazon’s practices, including acquisitions, privacy concerns related to Alexa and Ring doorbells, and potential antitrust cases.
How long has the investigation against Amazon been ongoing?
The FTC started investigating Amazon’s Prime sign-up and cancel systems in March 2021, and the investigation deepened in 2022 with the disclosure of internal documents.
What are the potential consequences for Amazon if found guilty?
If found guilty, Amazon may face legal penalties and be required to make changes to its designs and practices to ensure transparency and easier cancellation processes for customers.
More about deceptive design
- FTC Sues Amazon Alleging It Illegally Billed Consumers for Millions of Dollars in Unauthorized Charges
- FTC Chair Lina M. Khan’s Statement on Amazon Lawsuit
- FTC Act
- Restore Online Shoppers’ Confidence Act
- Amazon’s Prime Subscription Practices Under Investigation by FTC
- Deceptive Design (Dark Patterns) – European Union