The Federal Trade Commission filed a complaint against tech giant Amazon early Wednesday for allegedly tricking consumers into enrolling in their paid programs and making it nearly impossible to cancel their subscriptions.
According to the complaint, Amazon leadership purposely ignored changes brought to them that would have made it easier for consumers to navigate the company's Prime programs and instead used "dark patterns" to effectively violate the FTC Act and the Restore Online Shoppers’ Confidence Act.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina M. 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.”
The Commission vote authorizing to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Western District of Washington.
Internal documents from Amazon obtained by Insider showed evidence that the company intentionally made it harder for its users to navigate, and code-named the project "Iliad." After it launched in 2017, cancellations reportedly dropped by 14%.
In many instances, Amazon made it difficult for customers to purchase items without subscribing to its Prime membership program. The program costs $14.99/month and is recurring. Prime has more than 200 million members worldwide who pay $139 a year for faster shipping and other perks, such as free delivery and returns, LA Times reported. And, the button presented to customers to complete their transactions did not clearly state that in choosing that option they were also agreeing to start a Prime membership.
After customers learned they were subscribed, they would have to jump through hoops in order to cancel. First, consumers would have to find the cancellation flow, which then redirected them to several websites offering discounted deals to continue the plan, then finally get past the cancel auto-renew page to get rid of the service altogether.
This isn't the first quarrel between Amazon and the FTC. Lina Khan, the FTC chair, is publicly critical of the big tech giant, and she entered the antitrust scene in 2017 with the Yale law journal titled, “Amazon’s Antitrust Paradox."
The LA Times' noted in its report that Amazon has been the target of other lawsuits from the FTC. Earlier this month, Amazon reportedly agreed to pay a $25-million civil penalty to settle allegations that it violated child privacy law for storing children's voice and location data recorded by the Alexa voice assistant. And, Amazon agreed to pay $5.8 million in customer refunds for privacy violations with the Ring camera doorbell.