On June 21, the US Federal Trade Commission (FTC) filed a lawsuit against Amazon, accusing the e-commerce giant of enrolling millions of people in its paid subscription service, Amazon Prime, without their consent and making it difficult to cancel memberships.
Lawsuit Filed Against Amazon For Enrolling People in Paid Subscriptions Without Permission
The lawsuit, filed in a Seattle court, alleges that Amazon knowingly deceived consumers by enrolling them in automatically renewing Prime subscriptions through manipulative and deceptive user-interface designs known as “dark patterns.”
Amazon Prime offers benefits such as free shipping, discounts, and access to streaming services for movies and music in exchange for an annual fee of $139 for US members. The FTC claims that Amazon generates $25 billion in revenue annually from Prime subscriptions and that increasing subscriber numbers is one of its primary business goals.
Although Amazon made changes to its cancellation process in April under pressure from the FTC, the violations are alleged to have continued. The FTC is seeking civil penalties and permanent injunctions to prevent future violations. Reuters reported that Amazon has not yet issued a comment on the matter.
Investigation Going on Since 2021
The FTC has been investigating Amazon’s sign-up and cancellation processes for the Prime program since March 2021. FTC Chair Lina Khan stated that Amazon’s actions deceived and trapped people into recurring subscriptions, causing frustration and significant financial losses for users.
According to the complaint, customers who attempted to cancel their Prime membership encountered multiple steps that made the cancellation process burdensome. The complaint also mentioned that Amazon referred to this process as “Iliad Flow,” alluding to Homer’s epic poem about the protracted Trojan War.
This lawsuit against Amazon comes shortly after a separate lawsuit filed against Google by Gannett, the largest newspaper publisher in the US. Gannett accused Google of attempting to monopolize the digital advertising market, alleging that the company garners “exorbitant monopoly profits” while diminishing publishers’ revenues. Google’s Vice President of Google Ads, Dan Taylor, refuted these claims, stating that publishers have numerous options for advertising technology and retain the majority of revenue when using Google’s services.
