The Federal Trade Commission (FTC) has filed a lawsuit against Amazon, claiming that the company misled customers into signing up for its Prime subscription service while making it difficult for them to cancel. The lawsuit alleges that Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act through misleading design elements that coerced users into registering for Prime without their true consent. Additionally, the FTC argues that Amazon intentionally impeded design changes that would have simplified the cancellation process.
While Amazon has not yet commented on the lawsuit, FTC Chair Lina Khan asserts that the company “tricked and trapped” customers, resulting in financial losses for users. Furthermore, the FTC claims that Amazon made multiple efforts to obstruct and delay the investigation.
The investigation into Amazon’s Prime sign-up and cancellation systems began in March 2021, but gained momentum in 2022 when Insider obtained internal documents suggesting that Amazon was aware of customer complaints as early as 2017. The sign-up process encouraged customers to opt for a 30-day trial with a single click during checkout, but cancelling the service before the trial ended required navigating through multiple pages. Amazon even used the term “Iliad” to describe the lengthy cancellation process, drawing an analogy to the epic poem by Homer.
Under the leadership of Chair Lina Khan, the FTC has closely scrutinized Amazon’s practices, examining its acquisitions of MGM and One Medical, as well as privacy concerns surrounding devices such as Alexa and Ring doorbells. Khan, a well-known critic of Big Tech, faced calls from Amazon to recuse herself from antitrust cases due to perceived bias.
The use of deceptive design, often referred to as “dark patterns,” is not a new phenomenon. In 2020, the European Union criticized many websites for making it unnecessarily challenging for users to reject tracking cookies. However, the lawsuit against Amazon represents a significant legal test of the legality of such design patterns in the United States.
