The Federal Trade Commission (FTC) is suing Amazon for allegedly “tricking and trapping” customers into signing up for Amazon Prime and making it hard to cancel subscriptions.
The FTC filed a federal complaint Wednesday alleging that Amazon “knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime.”
The behemoth e-commerce company used “manipulative, coercive, or deceptive user-interface designs” to trick consumers into signing up for automatically renewing Prime subscriptions, and then made the cancellation process unnecessarily long and complicated, the consumer protection agency alleged in its complaint.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chairwoman Lina Khan said in a statement.
The complaint, filed in the U.S. District Court in the Western District of Washington, accuses Amazon of violating both the FTC Act and the Restore Online Shoppers’ Confidence Act.
Amazon responded with a flat denial of wrongdoing, saying customers “love” their Prime subscriptions.
“The FTC’s claims are false on the facts and the law,” Amazon spokesperson Tim Doyle said in a statement. “The truth is 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.”
“As with all our products and services, we continually listen to customer feedback and look for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out,” Doyle said.
In one colorful detail, the FTC said Amazon named the Prime cancellation process the “Iliad,” referring to “Homer’s epic about the long, arduous Trojan War.”
“Amazon designed the Iliad cancellation process (‘Iliad Flow’) to be labyrinthine,” the FTC’s complaint said.
Meanwhile, Amazon’s leadership slowed or rejected user experience changes that would have simplified the cancellation process for Prime customers because the changes would have affected Amazon’s bottom line, the complaint claims.
Prime was launched in 2005 and now has more than 200 million members worldwide. During the pandemic, Prime subscriptions jumped by 50 million in about a year.
A Prime subscription offers Amazon customers perks, including one or two-day delivery, free delivery and returns, the Prime Video streaming service, and certain e-books, video games, and grocery shopping services. Prime subscriptions cost $139 a year or $14.99 a month.
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Amazon reported that it made $9.6 billion from Prime subscriptions in just the first three months of this year, a 17% increase over that period last year.
The complaint also accuses Amazon of repeatedly trying to delay the FTC’s investigation by “bad faith” responses to requests for documents.
The FTC’s investigation into Amazon Prime began in March 2021.
This is not the first time the FTC has targeted Amazon.
Last month, Amazon settled with the FTC for $25 million after allegations it saved recordings of children’s voices and their location data through its voice assistant Alexa. Also in May, Amazon agreed to pay another $5.8 million in customer refunds after the FTC accused the company of privacy violations involving its Ring doorbell cameras.
The scrutiny comes as Amazon works to expand into new markets, including groceries and health care.