The US Federal Trade Commission (FTC) has accused Amazon of enrolling millions of consumers into its Prime subscription service without their consent and making it hard for them to cancel.
Amazon denied the accusation, stating the charges are “false on the facts and the law”.
The company’s Prime service – which offers access to shipping discounts and streaming services – currently has over 200 million subscribers, who pay $139 a year in the US and £95 per year in the UK.
The watchdog said Amazon “knowingly duped millions of consumers” into enrolling in the service by using website designs that promised discount offers for those who subscribe to the programme, without making the price clear, nor informing users that the programme would renew automatically every month.
Amazon was also accused of unnecessarily complicating the cancellation process, forcing customers to go through a “labyrinthine” process, known internally as the “Iliad”, in reference to the famous Greek epic.
“The Iliad Flow required consumers intending to cancel to navigate a four-page, six-click, fifteen-option cancellation process,” said the suit. “In contrast, customers could enrol in Prime with one or two clicks.”
The FTC is now seeking civil penalties and a permanent injunction to prevent future violations, according to a complaint filed in the US District Court for the Western District of Washington.
The filing also noted that Amazon modified its cancellation process around April 2023, shortly after the lawsuit was filed.
Amazon said it had been working to resolve the agency’s concerns and did not receive notice that the lawsuit would be filed.
“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,” the company said.
“We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialogue with the Commissioners themselves before they filed a lawsuit,” the company said in the statement.
“While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court.”
The lawsuit is the third action from the FTC involving Amazon in recent weeks. The company has recently agreed to pay $30.8m (£24.1m) to settle two separate charges that its products Ring and Alexa had violated privacy regulations.
In April, the UK’s competition watchdog revealed it is investigating Amazon’s planned takeover of robot vacuum maker iRobot Corp.
The company has also been making headlines over the past year regarding its widespread layoffs. In March, Amazon revealed it would cut 9,000 jobs worldwide, on top of 18,000 job cuts the business had already announced in January.
In the same month, Amazon revealed its intention to shut three UK warehouses and seven delivery stations, affecting more than 1,200 jobs.
Source: E&T
