FTC Sues Amazon Over ‘Manipulative’ Tactics Used to Enroll Millions in Prime
2 min read 21 Jun 2023, 09:17 PM IST Amazon duped customers into Prime subscriptions and made it difficult to cancel, federal agency says
PremiumWASHINGTON—The Federal Trade Commission sued Amazon.com on Wednesday, alleging the retail giant worked for years to enroll consumers without consent into Amazon Prime and made it difficult to cancel their subscriptions to the program.
The FTC’s complaint, filed in federal court in Seattle, alleged that Amazon has duped millions of consumers into enrolling in Amazon Prime, a subscription service costing $139 annually.
“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.
The complaint, which is partially redacted, is the culmination of an investigation that began in March 2021. The FTC, a federal agency tasked with enforcing antitrust laws and consumer protection laws, seeks monetary civil penalties without providing a dollar amount.
The FTC’s complaint alleged that Amazon used “manipulative, coercive, or deceptive user interface designs known as dark patterns" to dupe users into automatically renewing Prime subscriptions.
“Amazon leadership slowed or rejected changes that would’ve made it easier for users to cancel Prime because those changes adversely affected Amazon’s bottom line," the FTC added.
Amazon representatives didn’t immediately respond to a request for comment.
In August, Amazon complained about the FTC’s probe and accused the FTC of making excessive and unreasonable demands on founder Jeff Bezos and company executives. It asked the FTC to quash civil subpoenas issued to Bezos and Chief Executive Andy Jassy. The FTC largely rejected the request.
Amazon Prime gives members access to free two-day shipping, plus extra privileges like music and video streaming. Amazon has said it has more than 200 million paid Prime members worldwide.
The free and fast shipping benefit has been a bedrock of Prime’s growth and enabled the company to invest in other services.
FTC Chair Khan was a prolific writer about competition issues before she joined the Biden administration, especially as they related to big tech companies. She gained prominence through her criticism of Amazon, writing a widely read law-review article while a student at Yale Law School that argued that antitrust law failed to restrain the online retailer.
Early in her tenure, Amazon sought her recusal from investigations affecting the company, saying she couldn’t be impartial as an enforcer because of her past criticism of the retailer and tech company.
Amazon has already settled one other enforcement action with the FTC since Khan took over.
In May, it agreed to pay $30.8 million to settle claims that it improperly retained children’s Alexa voice recordings and allowed employees of its Ring video doorbell unit to surveil customers.
At the FTC, Khan has advocated for integrating the agency’s two missions, antitrust enforcement and consumer protection. She has also pushed to more aggressively use a century-old statute that allows the FTC to punish what the law calls “unfair methods of competition."
Write to Jan Wolfe at jan.wolfe@wsj.com and Dave Michaels at dave.michaels@wsj.com