FTC Sues Amazon For Allegedly Duping Its Prime Customers
The Federal Trade Commission sued Amazon in federal court Wednesday accusing the company of using deceptive business practices.
The suit, filed in Washington state, claims the retail giant “duped millions of customers into unknowingly enrolling in its Amazon Prime service,” according to the complaint.
The complaint alleges that “the primary purpose” of Prime’s cancellation policy was “to thwart” customers seeking to end their subscriptions.
Amazon currently controls 37.8% of U.S. e-commerce market, according to Statista and the lawsuit says the company uses “‘dark patterns’ to trick consumers.”
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said FTC chair Lina Khan.
The nation’s largest retailer used “manipulative, coercive, or deceptive use-interfaces” which are “known as ‘dark patterns'” to “trick consumers” into signing up for Prime subscriptions, which renew automatically, the FTC said in a press release.
Prime memberships, which cost $14.99 a month, are essential to the retailer’s bottom line, earning Amazon “$25 billion” in annual revenue, according to the complaint.
The commission wants to hold the company responsible for “knowingly” making the cancellation process for Prime membership difficult.
Amazon was aware that consumers were being “nonconsensually enrolled” but failed to take action until they knew of the investigation, according to the suit.
Amazon “attempted to delay and hinder the Commission’s investigation in multiple instances,” according to FTC’s press release and “revamped its Prime cancellation process for at least some subscribers” prior to the lawsuit being filed.
An Amazon spokesperson said the “FTC’s claims are false on the facts and the law. The truth is that customers love Prime.” They claimed that the company “continually listen[s] to customer feedback and look for ways to improve the customer experience.”
The spokesperson added that the company was unaware of the lawsuit and “look[s] forward to providing our case in court.”
