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U.S. Federal Trade Commission is suing ‘Amazon’ over how hard it is to cancel ‘Prime’

Have you ever tried to cancel your Amazon Prime subscription? It’s pretty tough, right? And yet you likely found it very easy to sign up for Prime. So easy, in fact, that you may have enrolled without even realizing it. Well, the Federal Trade Commission is suing the company over what it describes as “nonconsensual enrollment,” as well as the excessively difficult process for customers to cancel Prime subscriptions.

According to the FTC, Amazon has deliberately taken steps to get and keep as many Prime subscribers as possible, even using “dark patterns,” or manipulative web design, to do so. And it did so intentionally and knowingly, the heavily redacted lawsuit says.

“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 in a statement. “These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets.”

For the “nonconsensual enrollment” aspect of the case, the FTC points out that Amazon places multiple points along the way of a customer’s purchasing journey where they’re urged to sign up for Prime, including “interrupting” their shopping with “prominent” buttons offering Prime enrollments and tiny links declining them. The customer must select one in order to continue their purchase. The suit claims that Prime subscription offers aren’t always clearly worded as such, and consumers may think they’re simply choosing to get free shipping or a free trial without realizing that a paid subscription comes along with it. Amazon also made it confusing for people who wanted to just get Prime Video, the company’s streaming service, causing them to accidentally sign up for the more expensive Prime option instead.

And then there’s the Homeric journey one must take to cancel their Prime subscription. Seriously: Amazon even called it the “Iliad Flow” in internal documents uncovered last year by Insider. There, customers had to get through a four-page, six-click, 15-option process to cancel their subscriptions on desktop and an eight-page, eight-click minimum process on mobile. Getting to the Iliad Flow in the first place is its own odyssey, as the FTC describes:

To cancel via the Iliad Flow, a consumer had to first locate it, which Amazon made difficult. Consumers could access the Iliad Flow from by navigating to the Prime Central page, which consumers could reach by selecting the “Account & Lists” dropdown menu, reviewing the third column of dropdown links Amazon presented, and selecting the eleventh option in the third column (“Prime Membership”). This took the consumer to the Prime Central Page.

And then …

Once the consumer reached Prime Central, the consumer had to click on the “Manage Membership” button to access the dropdown menu. That revealed three options. The first two were “Share your benefits” (to add household members to Prime) and “Remind me before renewing” (Amazon then sent the consumer an email reminder before the next charge). The last option was “End Membership.” The “End Membership” button did not end membership. Rather, it took the consumer to the Iliad Flow.

The suit alleged that Amazon knows customers often enroll by accident and have a hard time canceling it, but it was only after the FTC began to investigate the practice that the company made real changes. And that was only after the company took steps to delay and defy the FTC’s investigation into its practices, which began in 2021. Amazon didn’t return all of the documents the FTC requested, something the FTC only realized when Insider published a report in March 2022 with leaked Amazon documents that showed that the company knew the process was confusing for customers, but believed that making it more clear and transparent would mean fewer sign-ups.

The FTC is accusing Amazon of various violations of the Restore Online Shoppers’ Confidence Act, including unfairly charging customers without consent, inadequate disclosures, nonconsensual enrollment, and failure to provide a simple cancellation mechanism.

Amazon denied all of this in an emailed statement, saying in part that “the FTC’s claims are false on the facts and the law.” The company added that “customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership.”

“We look forward to proving our case in court,” the company concluded.

A few hours before the case was filed, the company announced the dates for 2023’s Prime Days. The timing appears to be a coincidence, as Amazon said “the FTC announced this lawsuit without notice to us” and while the parties were in discussions about the matter.

While much of the media attention on the FTC has focused on its antitrust half, given Khan’s expertise in the area and the anti-Big Tech momentum that ushered her to the top of the commission, the agency hasn’t challenged some of Amazon’s big acquisitions made during Khan’s tenure, including the MGM and One Medical mergers. It has, on the other hand, sued Microsoft and Meta, while the Department of Justice’s antitrust arm is suing Google.

But the FTC also deals with consumer protection issues, and it’s been pretty clear, even before Khan came on board, that dark patterns are a priority. Difficult-to-cancel services have become a concern for the FTC under Khan, with the agency recently proposing a “click to cancel” rule that makes it as easy to cancel a service as it was to sign up for it. The agency also went after Amazon for violations of children’s privacy laws through Alexa recordings and for not properly securing its Ring cameras. Not exactly the big Amazon antitrust cases many were expecting to see from Khan, but a sure sign that the company is definitely in the FTC’s sights.

Article: The government is suing Amazon over how hard it is to cancel Prime

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