June 22, 2024

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Amazon faces accusations of deceiving Prime customers, the FTC lawsuit claims.

The US Federal Trade Commission (FTC) has filed a lawsuit accusing Amazon of engaging in deceptive practises to enroll customers in recurring Prime subscriptions and making it difficult for them to cancel. The FTC claims that Amazon used manipulative website designs to push customers into agreeing to auto-enrollment in Prime, which automatically renews their subscription. Amazon, on the other hand, denies the allegations, stating that they are false both in terms of facts and the law.

According to the FTC, Amazon’s tactics were aimed at discouraging users from opting out of auto-enrollment, as it would negatively impact the company’s profitability. The complaint, filed in federal court in Seattle, further alleges that the cancellation process for Prime subscriptions was intentionally convoluted, requiring customers to go through a complex and time-consuming procedure known internally as “Iliad.”

Although Amazon made some changes to the cancellation process prior to the lawsuit, the FTC argues that the company’s practises violated consumer protection laws designed to safeguard shoppers. FTC Chair Lina Khan stated that Amazon misled and trapped customers into recurring subscriptions without their consent, causing frustration and significant financial losses.

The FTC seeks a court order to compel Amazon to modify its practises and impose financial penalties, the amount of which is unspecified. Amazon, however, claims that it was in ongoing discussions with the agency regarding these issues and was taken by surprise when the lawsuit was filed without prior notice.

The FTC has previously warned online companies against employing “dark patterns,” manipulative techniques aimed at influencing consumer behaviour. The investigation into Amazon’s Prime programme has been ongoing since 2021, with the company accused of attempting to delay the probe by failing to timely provide requested documents. Analysts suggest that the FTC’s action against Amazon is intended to serve as an example and send a message to other online firms.