Amazon sued for allegedly signing customers up for Prime without consent
The Federal Trade Commission is suing Amazon for what it called a years-long effort to enroll consumers into Prime without their consent and making it difficult for them to cancel the subscription.
In its complaint, filed in Washington state, the FTC accused Amazon of using deceptive designs to trick "millions" of consumers into enrolling in the program. The agency also said the option to purchase items on Amazon without subscribing to Prime was more difficult in many cases. Consumers were sometimes presented with a button to complete their transactions — but the button didn't clearly state it would also enroll them into Prime.
Company leaders slowed or rejected changes that made canceling the subscription easier, the complaint said. The agency also argued those patterns were in violation of the FTC Act and another law called the Restore Online Shoppers' Confidence Act.
Internally, Amazon called the process "Iliad," a reference to the ancient Greek poem about the lengthy siege of Troy during the Trojan war.
"Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money," FTC Chair Lina Khan said in a statement. "These manipulative tactics harm consumers and law-abiding businesses alike."
Prime is Amazon's membership program, in which customers pay $139 a year, or $14.99 a month, for faster shipping and the streaming service Prime Video. In the first three months of this year, Amazon reported it made $9.6 billion from the subscription, a 17% jump from the same period last year.
An Amazon spokesperson called the FTC's claims "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 a statement Wednesday. "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."
NetChoice, a tech lobbying group that counts Amazon as a member, also released a statement accusing the FTC of overstepping.
"The complaint is that Amazon encourages people to use Amazon Prime — this is like going after Kroger for promoting its rewards program or Costco for its membership club," Carl Szabo, the group's vice president and general counsel, said.
Amazon has faced heightened regulatory scrutiny in recent years as it moved to expand its e-commerce dominance and dip its toes into other markets, including groceries and health care.
The tech giant has faced other lawsuits accusing its Prime cancellation process of being too complicated. Under scrutiny from the agency, the company in March provided consumers with instructions on how to cancel their Prime memberships in a blog post.
"Set on canceling? We'll be sad to see you go, but we'll be here when you're ready to return," the blog post reads. "Below are instructions on how to cancel your Prime membership."
The lawsuit follows another Amazon-related win by the agency just a few weeks ago. Earlier this month, Amazon agreed to pay a $25 million civil penalty to settle allegations it violated a child privacy law by storing kids' voice and location data recorded by its popular Alexa voice assistant. It also agreed to pay $5.8 million in customer refunds for alleged privacy violations involving its doorbell camera, Ring.