The Federal Trade Commission On Wednesday, Amazon sued for illegally getting consumers to sign up for its Prime service and then preventing them from canceling the subscription. This was the agency’s chairman’s most aggressive move against the company to date. Lina Khan.
The lawsuit, filed in U.S. District Court for the Western District of Washington, argues that Amazon used design tactics known as “dark patterns” on its website to entice people to subscribe to Prime, the FTC said in a press release. And if consumers wanted to cancel, they had to go through a complicated process to do so.
“Amazon has been tricking people into recurring subscriptions without their consent, which has not only frustrated users but also cost them a lot of money,” Ms Khan said in a statement.
The lawsuit marked the first time the FTC had sued Amazon in court under Ms. Khan, who rose to fame with one viral criticism of the company and who is stepping up the scrutiny of the e-commerce giant. Ms Khan said the power that big tech companies had over online commerce required far more aggressive action from regulators and had started cracking down on them.
Under Ms. Khan, the FTC continued a lawsuit against Meta, alleging it cut off emerging competitors by buying Instagram and WhatsApp, and is suing over Microsoft’s $69 billion blockbuster deal for video game publisher Activision Blizzard to block.
Ms. Khan has yet to launch a full antitrust case against Amazon, which the company’s critics are calling for. The FTC’s Antitrust Office has been investigating Amazon’s practices for years, and observers are keeping a close eye on how it will proceed with its findings.
The lawsuit is part of a larger effort by regulators to curb the power of tech giants including Amazon, Apple, Google, Microsoft and Meta, Facebook’s parent company. The Justice Department has filed several lawsuits in recent years antitrust law cases against google.
Amazon recently settled cases with the FTC that began prior to Ms Khan’s tenure. The company last month agreed to pay $25 million to settle FTC claims that Amazon’s Alexa home assistants illegally collected data from children. The agency also closed another privacy case with Amazon’s Ring home security subsidiary.
On Wednesday, the FTC said Amazon had made it particularly difficult to purchase a product from its store without subscribing to Prime at the time of checkout. The agency said Amazon made it difficult for consumers to find the page to cancel the service. Once they found it, Amazon bombarded them with offers designed to make them reconsider.
The lawsuit follows years of media and activist attention about how difficult it is to cancel Prime. In a 2021 complaint to the Attorney General for the District of Columbia, the Electronic Privacy Information Center, an advocacy group, stated that Amazon used manipulative designs to “frustrate the intentions of users who intend to cancel their Amazon Prime subscriptions “.
The FTC recently pledged to crack down on designs designed to nudge consumers or thwart their efforts to cancel a service.
“While dark patterns can covertly manipulate consumers, these practices are on the FTC’s radar,” the agency said in a 2022 report.
