FTC Sues Amazon for Duping US Consumers Into Signing Up for Prime Subscription — Retail Bum

The U.S. Federal Trade Commission (FTC) is suing Amazon for signing up millions of users for its Prime subscription service without their consent and making it harder for them to cancel the service.

In the lawsuit, FTC alleges that Amazon used “manipulative, coercive or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions.”

Amazon’s Prime membership, which typically costs around $139 per year, today is used by some 200 million users worldwide, with close to 147 million users based in Amazon’s home market. It is today a key source of sales for the eCommerce giant.

“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.

The lawsuit follows FTC’s investigation into Amazon’s sign-up and cancellation process, which began in March 2021. According to FTC, when Prime users try to cancel their subscription, they are made to go through steps before they can cancel their plan.

The regulator found that Amazon internally used the term “Iliad” to describe its cancellation process, referring to the Greek poet Homer’s poem about the Trojan War.

According to NPR, the lawsuit caught Amazon off guard as the company’s representatives were in talks with FTC, expecting to meet with commissioners.

In a statement, Amazon said FTC’s accusations were “false on the facts and the law.”

The company’s stock was down 1% on Wednesday.

Originally published at https://retailbum.com on June 22, 2023.