The Federal Trade Commission (FTC) has taken legal action against Amazon for allegedly enrolling customers in its Prime program without their consent and then devising an elaborate scheme to prevent them from unsubscribing.
The consumer protection agency made the allegations in a lawsuit (pdf) filed on June 21 at the U.S. District Court, Western District of Washington.
“Amazon used manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions,” the agency said in a statement.
The FTC accused Amazon of “cancellation trickery” and knowingly failing to address non-consensual subscriptions to the Prime service, which comes at a monthly charge of $14.99.
A subscriptions to Prime buys access to Prime Video, as well as free Amazon delivery and faster shipping. In the first quarter of 2023, Prime accounted for some $9.6 billion in Amazon earnings.
An Amazon spokesperson told The Epoch Times in an emailed statement that the FTC’s allegations are “false” and that its process for joining or leaving Prime is “clear and simple.”
‘Iliad Flow’
The consumer protection agency said in its complaint that Amazon intentionally designed its process for unsubscribing from Prime to be so onerous that the company internally referred to it as the “Iliad,” an epic story about the long and gruelling Trojan War that spans over 24 books.
“Amazon designed the Iliad cancellation process (‘Iliad Flow’) to be labyrinthinine,” the agency claimed, while alleging that Amazon leadership “slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes adversely affected Amazon’s bottom line.”
In order to cancel Prime, consumers must to click multiple pages where they’re faced with confusing options, with many selections taking customers out of the “Iliad Flow” so that in order to unsubscribe, they would have to start the process all over again.
“On the eighth and final page, Amazon presented five buttons,” the FTC said in the complaint. “Only the fifth and final button (‘End Now’) immediately cancelled the membership.”
“Amazon did not design the Iliad Flow to be simple or easy for consumers,” the agency continued. “The Iliad Flow inhibits or prevents many consumers who intend to cancel from cancelling their membership.”
Nonconsensual Enrollment
The problem of enrolling customers in Prime without their consent was also well known at Amazon, the consumer protection agency said in the complaint.
A number of Amazon employees pressed the company’s executives to address “nonconsensual enrollment” and make changes so that the firm would not be tricking its customers, the FTC said.
However, despite the issue being flagged for action internally, Amazon and its leadership “slowed, avoided, and even undid user experience changes that they knew would reduce Nonconsensual Enrollment because those changes would also negatively affect Amazon’s bottom line.”
As with the elaborately complex process of cancelling Prime subscriptions, the FTC said that nonconsensual enrollment also relied on the use of so-called dark patterns, which are manipulative design features that trick users into making decisions that they wouldn’t otherwise make.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina M. Khan, said in a statement.
The agency also accused Amazon of slow-rolling the process of handing over information requested by investigators.
An Amazon spokesperson disputed the allegations.
“The FTC’s claims are false on the facts and the law. The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership,” the spokesperson said in an emailed statement.
“As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out,” the spokesperson added.
Amazon also expressed concern about the FTC’s announcing of the lawsuit without prior notice during ongoing discussions between the company and agency staff.
“While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court,” the spokesperson added.
It comes as the FTC has taken hard-to-quit subscriptions into its crosshairs after saying it receives thousands of complaints each year from customers plagued by recurring charges that they couldn’t cancel or didn’t know they had signed up for.
In March, the agency proposed a new “click to cancel” rule that would make it easier for customers to end recurring subscriptions and memberships.
“The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties,” Khan said at the time.
Some of the specific changes proposed under the new framework include simplifying cancellation mechanisms and asking customers for their consent to be pitched additional offers or modifications when trying to cancel their subscriptions.
From The Epoch Times