The U.S. Federal Trade Commission on Wednesday sued Amazon for illegally soliciting consumers to sign up for its Prime service and preventing them from canceling subscriptions, the agency’s chairman Rina Khan said in a previous complaint against the company. is the most aggressive measure against
The lawsuit, filed in the U.S. District Court for the Western District of Washington, alleges Amazon used a design tactic called “dark patterns” on its website to trick people into signing up for Prime, the FTC released. said in And if consumers wanted to cancel, they had to go through complicated procedures.
“Amazon not only tricked people into subscribing without their consent, frustrated users, but also cost them a lot of money,” Khan said in a statement.
Amazon did not respond to a request for comment.
The lawsuit was the first time the FTC has brought Amazon to court under Khan, who has gained notoriety for criticizing the company online and has stepped up its scrutiny of the e-commerce giant. Khan said that given the power big tech companies have over online commerce, regulators need to act more aggressively and are starting to take action against them.
Under Mr Khan, the FTC continued its lawsuit against Meta, alleging that Meta cut off emerging competitors by acquiring Instagram and WhatsApp, and Microsoft’s deal with video game publisher Activision Blizzard. filed a lawsuit seeking an injunction against the $69 billion blockbuster deal.
Khan has yet to file the full-scale antitrust lawsuit against Amazon that critics have demanded. The FTC’s Antitrust Division has been investigating Amazon’s practices for years, and observers are watching how Amazon progresses with its findings.
The lawsuit is part of a larger effort by regulators to limit the power of tech giants including Amazon, Apple, Google, Microsoft and Facebook parent company Meta. The Justice Department has filed multiple antitrust lawsuits against Google in recent years.
Amazon recently settled a lawsuit with the FTC that began before Khan’s tenure. Last month, the company agreed to pay $25 million to settle an FTC allegation that Amazon’s Alexa home assistant device was illegally collecting data from children. The agency also settled another privacy lawsuit with Amazon’s home security subsidiary, Ring.
Amazon Prime has long attracted subscribers with promises of free fast shipping, access to a streaming video library, and other perks. The company said it will have more than 200 million members in its $139-a-year program as of 2021.customer last year spent $35 billion According to the company’s financial disclosures, it is affecting Amazon subscriptions, primarily Prime members.
On Wednesday, the FTC said Amazon made it particularly difficult to purchase items in its stores if you didn’t have Prime at checkout. The agency said Amazon is having trouble finding a page where consumers can cancel the service. When they found it, Amazon flooded them with offers intended to get them to change their minds.
The lawsuit comes after years of media and activist attention to how difficult it would be to cancel Prime. In a 2021 complaint to the Attorney General for the District of Columbia, the advocacy group Electronic Privacy Information Center said Amazon was operating to “frustrate users’ intent to cancel Amazon Prime subscriptions.” He said he used a unique design.
The FTC recently pledged to crack down on designs meant to provoke consumers or disrupt efforts to cancel services.
“Dark patterns can stealthily manipulate consumers, but such practices are subject to FTC scrutiny,” the agency said in a 2022 report.
Critics see Prime as central to Amazon’s dominance. That’s because Prime offers other perks, like access to Amazon streaming exclusives like “Tom Clancy’s Jack Ryan” and “The Lord of the Rings: The Ring of Power.” because it keeps customers at the company’s retail stores.
Amazon says Prime offers benefits to consumers. In recent years, when the company lobbied against antitrust reforms focused on tech giants, it regularly told lawmakers and the media that the changes would hurt Prime.
