(CN) — The Federal Trade Commission hit Amazon.com with an 87-page federal complaint Wednesday, alleging the tech giant enrolls customers in its paid Prime program without consent and then purposefully makes it difficult to cancel subscriptions.
Unenrolling from Prime is so difficult, the FTC says, that Amazon even internally named the process “Iliad,” referring to Homer’s epic about the Trojan War that spans more than 24 books and nearly 16,000 lines.
At $14.99 a month, a subscription to Prime buys free Amazon delivery, faster shipping and access to Prime Video. Since its launch in 2005, Prime today counts more than 200 million members worldwide and it accounted for $9.6 billion of the Seattle-based company's earnings In ihe first quarter of 2023.
But the FTC alleges that Amazon used “manipulative, coercive, or deceptive user-interface designs” to trick customers into enrolling in Amazon Prime subscriptions, which renew automatically. Customers are given numerous opportunities to subscribe to Amazon Prime when they are in the check-out process for an order. To purchase items without a subscription, however, the FTC says it's difficult to locate the option. It also says in some cases the button to complete the transaction did not clearly state customers were also agreeing to join Prime.
Customer enrolled in Prime face multiple steps if they want to cancel, according to the complaint, and they can be tricky to pin down. Throughout the process, customers are redirected multiple times to pages where Amazon offers the option not to cancel, touting discounted prices for continuing the subscription as well as the possibility of turning off the auto-renew feature. Customers must go through all of these pages to finally cancel the service. The FTC notes that cancellation required customers to navigate four pages, six clicks and 15 options. Enrollment, by contrast, takes one or two clicks.
“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 press release. “These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from “dark patterns” and other unfair or deceptive practices in digital markets.”
An Amazon spokesperson responded to the lawsuit by calling 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.
Amid sections of the complaint with heavy redactions, the FTC alleges that some Amazon employees urged leadership to revamp business practices to no avail. Amazon apparently revamped the cancellation process for some subscribers ahead of the lawsuit.
The FTC notes that Amazon implemented the drawn-out cancellation process in April 2016 and changed it only once in the intervening years in April 2023.
“However, prior to that time, the primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather to thwart them,” the complaint says.
Even with revisions, the FTC says the cancellation process is problematic because it remains difficult to locate, requires five to six clicks, and includes “extraneous information unnecessary to the cancellation process and presented solely to discourage cancellation.”
“The continued presence of these problematic elements illustrates that, although the form of the cancellation flow recently changed, Amazon’s mindset has not,” the complaint says.
Amazon's spokesperson argued meanwhile that the government brought the lawsuit in the U.S. District Court for the Western District of Washington “without notice to us” and while the company was in discussions with the commission.
“While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court,” the spokesperson said.
While the federal investigation has been underway, the FTC contends that Amazon executives “attempted to delay and hinder” it. A section about these allegations says, amid redactions, that Amazon didn’t comply with requests for documents and testimony and petitioned the agency to stop the investigation.
The FTC claims that Amazon, which runs the world’s largest subscription program, produced fewer documents during the two-year investigation than small businesses routinely produce. Further, the company didn’t turn over most of its documents until 18 months after the initial request.
“Amazon’s wrongful conduct foreseeably caused, and did in fact cause, delay of the Commission’s investigation,” the complaint says. “But for Amazon’s effort to frustrate the Commission’s investigation, the Commission would have filed this action many months earlier.”
The FTC's complaint is accompanied by dozens of pages of screenshots, some of these filed under seal as well. Represented by in-house counsel, the government seeks civil penalties and to stop certain business practices.
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