Amazon Sued By Federal Trade Commission, Which Says Tech Giant “Tricked And Trapped” Customers With Prime Subscription Tactics
Amazon has been sued by the Federal Trade Commission for what the U.S. regulatory agency described as “years-long” manipulations of Prime subscribers.
The tech giant engaged in a “years-long effort to enroll consumers into its Prime program without their consent while knowingly making it difficult for consumers to cancel their subscriptions to Prime,” the FTC said in a press release. (Read the full complaint HERE.)
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The company used deceptive designs known as “dark patterns,” the FTC alleges, which aim to trick consumers into enrolling in Prime subscription plans set to automatically renew.
Amazon only selectively reports data for Prime, which offers benefits including video programming, faster delivery of packages and discounts on Whole Foods purchases. In 2021, then-CEO Jeff Bezos (who segued to the executive chairman role in 2022, handing the CEO reins to Andy Jassy) said Prime had passed 200 million global subscribers.
The FTC has taken a tough line on tech companies during the administration of President Biden. Agency Chair Lina M. Khan took on the role in 2021 after building a career in antitrust law. She has focused on imposing limits on tech firms, enduring backlash from free-market-oriented Republicans. The suit is the FTC’s first against Amazon, with regulatory observers declaring it Khan’s most aggressive move yet. While still a law student in 2017, Khan gained attention for writing a paper titled “Amazon’s Antitrust Paradox,” which was published in the Yale Law Journal.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” Khan said in the press release. “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.”
Amazon did not immediately respond to Deadline’s request for comment about the suit.
In cases originating prior to Khan’s tenure, the FTC has reached settlements recently with Amazon over its use of Alexa smart home devices and Ring home security systems.
Prime costs $139 a year and has been a key driver of overall subscription sales generated across Amazon platforms. The company said customers spent $35 billion on subscriptions in 2022, with the bulk of that being Prime. More than revenue, though, the value of Prime is in its trove of data about customers, which has considerable value both internally and as a commodity Amazon can sell to third parties. While Prime Video is more than 15 years old, it is just now beginning to be woven together with customer data and the company’s burgeoning ad-sales business.
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