Amazon denies fraud claims over Prime cancellation

PHOENIX (CN) — For the second time in a year, Amazon’s legal team appeared in a Phoenix courtroom to fend off fraud accusations regarding the company’s Prime subscription cancellation process.

Arizona Attorney General Kris Mayes sued the tech giant in May 2024, accusing it of violating the Arizona Consumer Fraud Act by preventing customers from easily canceling their subscription and failing to warn consumers how many steps the cancellation process may take.

“You’ve got a defendant here that’s deliberately trying to thwart cancellation,” state attorney Rob Lopez said Thursday in a hearing on Amazon’s second motion to dismiss.

Lopez told Maricopa County Judge Dewain Fox that Amazon devices consumers who sign up for Prime with the phrase “cancel anytime.”

“The trap is fully revealed when Amazon interferes with, thwarts and ultimately prevents consumers from canceling,” he said.

To cancel a Prime membership, consumers are routed to multiple pages asking if they are sure they’d like to cancel, prompted to click “no” to multiple deals and the option to temporarily pause their subscription rather than immediately cancel. Lopez says “cancel anytime” is deceptive because the “least sophisticated consumer” can be easily tricked into keeping an unwanted membership or frustrated to the point of giving up the effort to cancel.

Lopez called the process a maze, suggesting that only those “good at puzzles or computers” can make it to the end.

“This is a deliberate thing,” he said. “This isn’t just an awkward interface Amazon has set up.”

The process’s complexity aside, Amazon says the attorney general’s claim falls short of an Arizona Consumer Fraud Act violation.

Though the attorney general’s office claims it is misleading, it concedes that consumers technically can “cancel anytime,” leaving their argument dead in the water, defense attorney Moez Kaba said Thursday.

“They are upset about the number of steps in the process to cancel,” he said flatly. “You can’t sustain an ACFA claim where the statement is true.”

The attorney general’s office says it intentionally omits cancellation information when advertising Prime, but Kaba argues that no part of the ACFA requires a description of the cancellation process at the outset.

Even if the process was misleading or deceptive, Kaba argues, it cannot be challenged under the ACFA because the cancellation process is not part of the sale or advertisement of a good or service but instead is a customer experience issue that comes after a purchase.

Lopez disagreed. The specific language of the statute describes features “in connection with” the sale or advertisement of goods or services. Lopez claims that language is broad enough to go beyond the initial sale and describe any feature that resulted from a purchase, including trying to cancel a subscription.

The ACFA requires no advertisement related to subscription cancellation, but Lopez says Amazon customers would be better off if the lengthy cancellation process were advertised to them before they purchased a subscription. Kaba scoffed at the suggestion.

The parties made similar arguments in December, leading Fox to grant Amazon’s first motion for dismissal but allow the attorney general to amend the complaint. In another Phoenix courtroom, Mayes will soon defend another lawsuit against Amazon, this one regarding its “buy box” algorithm. Like this case, the attorney general’s buy box lawsuit was dismissed in June, but the plaintiff amended the complaint in July.

Fox has 60 days to rule on Amazon’s motion to dismiss the Prime cancellation claim.

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