Amazon is accused of defrauding Prime subscribers

The US claims that Amazon misleads people into signing up for Prime subscriptions that automatically renew and makes it impossible to cancel.

In a lawsuit, the Federal Trade Commission (FTC), the nation’s watchdog for consumer rights, made the allegations.

It gave examples of purportedly “manipulative” website layouts.

Amazon denied the allegations, describing them as “false on the facts and the law.”

Globally, Prime has more than 200 million subscribers. In the US, the programme, which provides shipping benefits, access to streaming movies, and more, costs $139 per year or $14.99 per month, and in the UK, it costs £95 per year.

According to the FTC, Amazon employed website layouts that pressured users into accepting the terms of a Prime subscription that would automatically renew when they made purchases.

Because “those changes would also negatively affect Amazon’s bottom line,” the agency claimed in the complaint, which was filed in federal court in Seattle, the corporation made it impossible for consumers to opt out of auto-enrolment.

Furthermore, the FTC said that Amazon subjected consumers who wanted to cancel to a lengthy “four-page, six-click, fifteen option” process, which was internally referred to as “Iliad” in honour of the Greek classic about the “long, arduous Trojan War”.

Although Amazon changed the cancelling process just before the case was filed, the FTC said that the company’s methods violated regulations meant to safeguard consumers.

Amazon deceived and locked people into recurring subscriptions without their permission, which frustrated users and cost them a lot of money, according to FTC Chair Lina Khan.

In addition to unspecified monetary penalties, the FTC is requesting a court order compelling Amazon to alter its practises.

Amazon claimed that when the complaint was abruptly filed, a conversation about the problems was still in progress with the government.

The business stated, “The truth is that people adore Prime, and by design, we make it very clear and easy for customers to both sign up for or cancel their Prime subscription.

The FTC has repeatedly urged online businesses not to use “dark patterns” to trick customers.

It had been looking into Amazon’s Prime since 2021.

According to the report, the business made numerous attempts to stall the investigation, including by failing to submit papers on schedule.

Senior Insider Intelligence analyst Evelyn Mitchell-Wolf claimed that the FTC was “making an example of Amazon” by doing this.

Companies frequently make it more challenging to cancel an account than it is to open one, she said.

Active law enforcement

Ms. Khan, who was chosen for the position by President Joe Biden, gained notoriety for criticising US competition law in relation to Amazon.

She has committed to taking more active action to check the influence of American IT firms and online commerce.

This complaint is the third action the FTC has taken against Amazon in recent weeks.

Last month, the business agreed to pay $25 million to resolve allegations that it had kept recordings made by kids on Alexa in violation of child privacy regulations.

It consented to shell up an additional $5.8 million to settle allegations that Ring, the doorbell business that Amazon bought in 2018, had broken privacy laws by granting workers unlimited access to customer footage and failed to take security measures against hackers.