The FTC isn't letting up on Amazon, alleging in a new lawsuit that the world's largest online retailer knowingly tricked "millions of consumers" into signing up for its paid Prime service, then made them jump through hoops in order to cancel. The company "trapped people into recurring subscriptions without their consent ... costing them significant money," says FTC Chair Lina Khan, who's taken an aggressive approach to anti-competitive practices by big tech companies, per the New York Times. The FTC says Amazon used "manipulative, coercive or deceptive user-interface designs known as 'dark patterns'" to dupe consumers into enrolling in the world's largest subscription program—in some cases simply by clicking a button to complete a normal transaction.
At the same time, the company "knowingly complicated the cancellation process," which was internally described as "Iliad," a reference to Homer's very long poem about the decade-long Trojan War, the FTC says. In fact, "the primary purpose of its Prime cancellation process was not to enable subscribers to cancel, but to stop them." "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 continues. It says Amazon did change the way users cancel Prime subscriptions under pressure from the federal agency in April, per Reuters. Yet "violations are ongoing" and cancelling on Amazon.com still "requires five clicks on desktop and six on mobile."
At a cost of $139 a year in the US, Prime offers consumers free and fast shipping in addition to other benefits, including access to extensive video, song, and podcast libraries. With more than 200 million members worldwide, it generates $25 billion in annual revenue, according to the FTC, which launched an investigation into the service in March 2021. During that investigation, Amazon allegedly committed "intentional misconduct" meant to hinder investigators' efforts, including through providing "bad faith" responses to document requests. Amazon—which has argued "reforms to antitrust laws focused on the tech giants" would impede Prime, per the Times—has yet to respond to the complaint. The company saw its shares drop 0.9% in midday trading, per Reuters. (More Amazon Prime stories.)
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