The U.S. Federal Trade Commission (FTC) has accused Amazon of enrolling millions of consumers into its paid subscription service, Amazon Prime, without their consent and making it challenging for them to cancel.
The FTC has filed a lawsuit in federal court in Seattle, alleging that Amazon has knowingly misled consumers into unknowingly enrolling in Amazon Prime.
According to the FTC, Amazon has used manipulative and deceptive user-interface designs, known as "dark patterns," to trick consumers into signing up for automatically renewing Prime subscriptions. The agency is seeking civil penalties and a permanent injunction to prevent future violations.
The lawsuit is part of the Biden administration's efforts to rein in the market power of Big Tech firms and increase competition to protect consumers. Amazon Prime, which generates $25 billion in annual revenue, offers fast, free shipping, discounts, and access to a wide range of entertainment content.
Amazon has responded to the allegations, calling the claims "false on the facts and the law" and asserting that customers find it easy to sign up for or cancel their Prime memberships. The company also expressed concern about the FTC's timing, as the lawsuit was announced during ongoing discussions with FTC staff members.
The FTC has been investigating Amazon's Prime sign-up and cancellation processes since March 2021. The agency claims that Amazon intentionally delayed the investigation by providing "bad faith" responses to document requests.
News of the lawsuit coincided with Amazon's announcement of the July dates for its major sales event, Prime Day.
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