FTC sues Amazon for "manipulative tactics" in enrolling and cancelling Prime membership

Amazon faced the US regulator's ire over alleged unauthorised enrollment in its Prime membership and putting in place complex cancellation processes.

FTC sues Amazon for "manipulative tactics" in enrolling and cancelling Prime membership

Thursday June 22, 2023,

4 min Read

The US Federal Trade Commission (FTC) has sued Amazon, accusing the company of enrolling consumers on its Amazon Prime programme without consent and designing a complex cancellation process.

The FTC's investigation revealed that Amazon adopted manipulative user-interface designs, known as "dark patterns," to trick consumers into signing up for its membership.

"For years, Defendant Amazon.com, Inc. has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service," the complaint said

In the lawsuit filed in the US District Court for the Western District of Washington, the FTC argued that Amazon's executives were aware of the non-consensual enrollment and the complicated cancellation process but failed to take significant action until they became aware of the FTC's investigation.

"Amazon and its leadership—including Lindsay, Grandinetti, and Ghani—slowed, avoided, and even undid user experience changes that they knew would reduce Nonconsensual Enrollment because those changes would also negatively affect Amazon’s bottom line," the FTC said in the lawsuit.

Amazon called its online cancellation process the "Iliad Flow"—a reference to an epic Greek poem. It required customers seeking to cancel their Prime subscription to go through a convoluted four-page process involving six clicks and 15 different options. In contrast, signing up for Prime initially required just one or two clicks.

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Prior to the enquiry, consumers who signed up for Amazon Prime using devices like the Amazon FireStick and Fire TV through the Prime Video application did not have the option to cancel their subscriptions. Instead, they were required to use the Iliad Flow service or contact customer service for cancellation.

In its complaint, the FTC identified five ways where Amazon utilised 'dark patterns':

  • Forced action: Amazon compelled consumers to choose whether to enrol in Prime before completing their purchase. This restricts the user's ability to make an informed decision and may lead to unintended subscriptions.

  • Interface interference: Amazon manipulated the user interface to prioritise certain information while downplaying crucial details. During the Prime checkout enrollment process, Amazon revealed the terms and conditions of Prime only once, in a small and easily missed font. By emphasising "free shipping" and diverting attention away from Prime's price, some users may unknowingly enrol without giving informed consent, FTC said. In the Iliad Flow, Amazon made use of warning icons and diversionary options to create anxiety and discourage cancellation.

  • Obstruction ("Roach Motel"): Amazon intentionally complicated a process to discourage users from taking a specific action. It made the option to decline enrollment difficult to locate. Some users reported struggling to find the less prominent "No Thank You" link to decline enrollment. In the Iliad Flow, Amazon made it challenging for users to enter and diverted them to marketing and alternative options, undermining their intent to cancel.

  • Misdirection: Misdirection is a design element that distracts users' attention from one aspect by focusing on another. In the Prime checkout enrollment flow, Amazon presented asymmetric choices that made it easier to enrol than decline. Some versions offered only a less noticeable blue link to decline Prime. Similarly, in the Iliad Flow, Amazon used animation, contrasting colours, and enticing text to draw attention away from cancellation options towards alternatives like "Remind me later" or "Keep my benefits."

  • Sneaking: Through Sneaking, Amazon concealed or delayed the disclosure of crucial information, the FTC noted. In the Prime enrollment checkout flow, Amazon failed to clearly and prominently display Prime's terms and conditions, including its price and auto-renewal attribute.

The commission's investigation found that the cancellation process was designed to frustrate consumers, with the aim of maintaining a large Prime subscriber base and protecting Amazon's bottom line.

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina M Khan said in a statement.

“These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from “dark patterns” and other unfair or deceptive practices in digital markets,” she added.

Edited by Kanishk Singh