Amazon Faces Urgent Trial Over Alleged Prime Subscription Tricks

UPDATE: Amazon is set to face a high-stakes trial starting Monday, October 30, 2023, as the Federal Trade Commission (FTC) accuses the tech giant of deceptive practices regarding its Prime subscription service. The lawsuit alleges that Amazon tricked millions into enrolling in the service, which costs $139 per year, while making cancellation nearly impossible.

The FTC’s complaint, filed in June 2023, claims that Amazon employed “dark patterns” during checkout to manipulate consumers into signing up. Crucially, the case highlights two significant allegations: that customers were enrolled without their clear consent and that Amazon created a convoluted cancellation process internally dubbed “Iliad.” This name references Homer’s epic about the lengthy Trojan War, underscoring the arduous nature of cancelling the subscription.

The trial will occur in a federal court in Seattle under Judge John Chun, who is also overseeing a separate FTC case targeting Amazon for allegedly running an illegal monopoly, scheduled for trial in 2027. This lawsuit is part of a broader initiative to rein in the power of major tech companies in the U.S., following years of regulatory inaction.

According to court documents, Amazon was aware of widespread “nonconsensual enrollment” in its Prime service but resisted changes that could reduce these unwanted sign-ups due to their impact on revenue. The FTC asserts that Amazon’s checkout process forced consumers to navigate confusing interfaces, where declining Prime membership required finding inconspicuous links, while signing up was facilitated by prominent buttons. Additionally, critical information about Prime’s pricing and automatic renewal was often obscured or presented in fine print.

“For years, Amazon has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service,” the FTC’s complaint states. The Prime service has become integral to Amazon’s business, with subscribers typically spending significantly more than non-members.

The lawsuit also condemns Amazon’s complex cancellation process, which the FTC describes as a “labyrinthine” procedure involving four pages, six clicks, and fifteen options to successfully cancel membership. The FTC is seeking financial penalties, monetary relief, and permanent injunctions that would mandate the company to revise its practices.

Central to the case is the Restore Online Shoppers’ Confidence Act (ROSCA), legislation enacted in 2010 that prohibits charging consumers for internet services without clear and transparent terms, express consent, and straightforward cancellation options. The FTC alleges Amazon failed to disclose Prime’s terms adequately before collecting billing information and did not obtain genuine informed consent prior to charging customers.

In its defense, Amazon is expected to argue that ROSCA and other regulations do not explicitly prohibit the practices under scrutiny and that the FTC is misinterpreting the law. The company has pointed to improvements made to its Prime enrollment and cancellation processes, claiming the allegations are outdated.

The jury trial is anticipated to last approximately four weeks, relying heavily on internal Amazon communications and documents, along with testimonies from Amazon executives and expert witnesses. If the FTC succeeds, Amazon could face hefty financial penalties and be compelled to overhaul its subscription practices under court supervision.

As this landmark trial unfolds, it holds significant implications for consumer rights and the practices of major tech companies. The outcome could reshape how subscription services operate, potentially making it easier for consumers to understand their rights and navigate cancellation processes.

Stay tuned for updates as this urgent case develops. The implications for millions of consumers and the future of online subscriptions hinge on the court’s decisions in the coming weeks.