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Photographer: Thorsten Wagner/Bloomberg via Getty Images
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The Federal Trade Commission filed a lawsuit on Wednesday Amazonclaiming that the country’s dominant online retailer deliberately deceived millions of consumers into signing up for its Prime Basic program and “sabotaging” their attempts to cancel.
The agency alleges that Amazon violated the FTC and the Online Shoppers Trust Restoration Act by using so-called dark patterns, or deceptive design techniques intended to direct users towards a particular option, to push consumers to sign up for Prime without their consent.
“Amazon deceived people and trapped them into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina Khan said in a statement.
Amazon representatives did not immediately respond to a request for comment. Amazon shares fell 1% in early trade.
The FTC had been investigating Amazon Prime enrollments and cancellations since March 2021. Tensions flared between Amazon and the FTC when the agency sought to have CEO Andy Jassy and founder Jeff Bezos testify about key company practices. Amazon argued that the order would be burdensome and unwarranted, which the FTC denied.
Launched in 2005, Prime has grown to be one of the most popular subscription services in the world, with more than 200 million members globally, and has generated billions of dollars in revenue for Amazon. Membership costs $139 per year and includes perks like free shipping and access to streaming content.
The lawsuit, filed in the US District Court for the Western District of Washington, accuses Amazon’s leadership of slowing down or refusing to make changes that would have made it easier for users to cancel Prime because those changes “negatively affected Amazon’s profits.”
Amazon has made it difficult for consumers to purchase items on its site without Prime, and the button directing users to complete their transaction did not clearly state that they also agreed to join Prime for a recurring subscription, the complaint says.
The FTC has claimed that the cancellation process is difficult to navigate and is designed to deter consumers from terminating their Prime subscription. Citing a report from Amazon, the agency said Amazon used an internal term called “The Iliad” to describe the operation, a reference to Homer’s epic poem about the Trojan War. from the inside.
The complaint marks the third lawsuit the FTC filed against Amazon last month. Amazon agreed in late May to pay the agency more than $30 million to settle cases alleging privacy gaps in its Alexa and Ring units. Amazon said it does not agree with the FTC’s allegations but has settled for the matter to move forward.
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