Amazon Misled Customers Into Prime Subscriptions, FTC Says

It’s awfully easy to sign up for Amazon Prime with a free 30-day trial: Just click a link, sign in or register and add your credit card info, if you haven’t done so already. But millions of people subscribed to the $139-a-year service without realizing they’d done so, according to a complaint filed by the Federal Trade Commission (FTC).

The company “used manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ ” to get consumers to enroll in automatically renewing Prime subscriptions, alleges the complaint filed June 21 in U.S. District Court for the Western District of Washington (Amazon is based in Seattle).

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It notes that during the checkout process, for example, the button presented to consumers to complete their transaction sometimes didn’t make it clear that clicking that option meant they were agreeing to sign up for Prime. Such practices are “not only frustrating” for users, they “also [cost] them significant money,” FTC Chair Lina M. Khan said in a press statement.

The FTC says Amazon “knowingly” makes it difficult for customers to cancel their subscriptions to Prime, which has about 168 million members in the U.S., according to a 2022 Consumer Intelligence Research Partners (CIRP) report. (The FTC has taken aim at other businesses, including magazines and streaming services, that make it difficult to cancel unwanted plans.)

Amazon, which reported first-quarter sales of $127.4 billion (with a net income of $3.2 billion), has long been accused of such deceptions. In 2019, the British ad industry’s Advertising Standards Authority ruled that an Amazon promo for Prime was “likely to mislead.” It argued that consumers checking out on the site had the option to click on a big gold button to both order and sign up for a free 30-day Prime trial, and a gray box promising “free one-day delivery” and that Amazon didn’t make it clear that clicking on the gray box would also include their signing up for Prime. The checkout process had a far less prominent “continue and don’t gain Amazon Prime benefits” link, the authority said. 

Others have noted that it’s tough to cancel Prime subscriptions, including the Norwegian Consumer Council, which filed a legal complaint against the company about its labyrinthine cancellation process in 2021. 

The difficulty with canceling was quite intentional, the FTC notes in the complaint, which describes how Amazon code-named the multistep cancellation process “Iliad Flow,” a reference to the epic Greek poem about the “long, arduous Trojan War.” The agency alleges that Amazon and its leadership “slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes adversely affected Amazon’s bottom line.”