FTC Hits Amazon With Lawsuit for ‘Tricking’ Users Into Prime Subscriptions

Amazon is being sued by the Federal Trade Commission for signing up customers for Prime memberships without their consent. In a complaint filed on Wednesday (PDF), the agency also accused the company of undermining the cancellation process for consumers. The news comes on the heels of the e-commerce giant announcing its July Prime Day sales event.

According to the filing, Amazon used a tactic called “dark patterns” to coerce millions of consumers into enrolling in auto-pay Prime subscriptions. The FTC’s complaint states that the company does not sufficiently convey the monthly cost of membership. Additionally, the suit cites Amazon corporate leaders who allegedly subverted changes to the user interface that would reduce nonconsensual enrollments. 

FTC head Lina Khan took to Twitter and said Amazon purposely worked to botch subscription cancellations, internally “analogizing the cancellation process to the epic tale of a brutal war” by calling it “Iliad Flow.” While the FTC acknowledged that the retailer made significant adjustments to its cancellation procedures for some subscribers shortly before the suit was filed, the agency asserts that the company has violated the FTC Act and the Restore Online Shoppers’ Confidence Act.

Khan also urged the public to submit comments on the FTC’s proposed “click to cancel” rule, which would require companies to make it quick and easy to cancel auto-renewed subscriptions.

Amazon denied the agency’s 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,” an Amazon spokesperson told CNET in an emailed statement. “We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialog with the Commissioners themselves before they filed a lawsuit.”