Amazon sued after millions were lured into enrolling in Prime
The lawsuit marks the first time the US Federal Trade Commission has sued Amazon since its chair, Lina Khan, took the leader's position in 2021.
The US Federal Trade Commission has filed a lawsuit against Amazon for what it claims to be a years-long campaign to sign up customers for its premium membership service, Amazon Prime, without their agreement and to make it difficult for them to quit.
The US consumer protection agency, the FTC, filed a federal complaint in Seattle, where Amazon is headquartered, alleging that the tech giant “knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime” via a secret project internally called “Iliad”.
The lawsuit marks the first time the agency has sued Amazon since Lina Khan was appointed as its chair in 2021.
The FTC said in its lawsuit that Amazon utilized "manipulative, coercive or deceptive user-interface designs known as 'dark patterns' to trick consumers into enrolling in automatically renewing Prime subscriptions."
Furthermore, it claimed that customers were occasionally given the option to finish their purchases by pressing a button that did not explicitly specify that doing so would sign them up for Prime.
According to the lawsuit, company executives delayed or rejected modifications that would have made canceling the subscription simpler. It claimed that the trends were against the Restore Online Shoppers' Confidence Act and the FTC Act.
More than 200 million people worldwide subscribe to Prime, which was founded in 2005. Members pay $139 a year, or $14.99 per month, in exchange for speedier shipping and additional benefits including free delivery, returns, and the Prime Video streaming service. A 17% increase over the same period last year, Amazon reported making $9.6 billion from subscriptions in the first three months of this year.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said Khan in a prepared statement. “These manipulative tactics harm consumers and law-abiding businesses alike.”
As it tried to increase its e-commerce dominance and dipped its toes into other areas, like food and healthcare, Amazon has come under more regulatory scrutiny in recent years.
Just a few weeks ago, the FTC achieved another victory involving Amazon. Amazon agreed to pay a $25 million fine earlier this month to resolve allegations that it stored children's speech and location data collected by its well-known Alexa voice assistant in violation of a child privacy statute. Additionally, Apple consented to pay $5.8 million in reimbursements to customers for claimed privacy violations concerning the Ring doorbell camera.