Amazon duped millions in Prime enrollment scam, says FTC

The US Federal Trade Commission (FTC) is taking legal action against Amazon, accusing the online shopping behemoth of tricking consumers into signing up for its Prime membership program while also making it nearly impossible for consumers to cancel their subscriptions.

The FTC complaint, filed Wednesday, June 21st, claims Amazon would knowingly enroll unsuspecting consumers in the $14.99 monthly membership program without their consent.

“Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions,” the FTC said.

According to the complaint, Amazon execs purposefully made the cancellation process extremely complicated in order to "sabotage" Prime subscribers from actually disenrolling from the membership and had been encouraging the unscrupulous practices since 2017.

The FTC said Amazon leadership knowingly slowed or rejected program changes that would have smoothed out the cancellation process, and only attempted to address the issues once the FTC launched an investigation in 2021.

The 159-page legal complaint – which shows dozens of pages filled with redactions – charges Amazon with unfair or deceptive practices in violation of the FTC Act.

The filing also charges Amazon with violating the Restore Online Shoppers’ Confidence Act, which requires all online merchants to provide consumers with full disclosure of sale terms before initiating any online financial transaction.

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

“These manipulative tactics harm consumers and law-abiding businesses alike," Khan added.

According to the FTC, during Amazon’s online checkout process, consumers were faced with numerous opportunities to subscribe to Amazon Prime at $14.99/month ($139 annually).

In many instances, the option to bypass purchasing the membership was not clearly presented, leading many consumers to sign up for the recurring monthly subscription charge without even realizing it.

When consumers then tried to cancel the membership, they were redirected through an endless maze of pages riddled with hard-to-find buttons and multiple steps to follow, the filing said.

FTC compares process to Greek tragedy

In its release, the FTC actually went so far as to compare Amazon’s checkout and cancellation process to the lengthy ancient Greek poem known as the Iliad, citing a previous report by Insider.

Amazon Iliad flow Prime member cancellation
Federal Trade Commission v. Amazon INC

That media report uncovered documents referring to Amazon's deceptive tactics by the code name "Project Iliad."

The epic piece of literature, written in 800 B.C.E. by the much revered Greek poet Homer (Iliad and the Odyssey), was “set over twenty-four books and nearly 16,000 lines about the decade-long Trojan War,” the FTC explained.

One of the sections in the FTC complaint was even titled "Prime’s Four-Page, Six-Click, Fifteen-Option Iliad Cancellation Process."

These included options to either continue the subscription at a discounted price, turn off the auto-renew feature, or decide not to cancel, the FTC said.

It was only after navigating through those pages in the "Iliad flow," were consumers given the option to cancel, it said.

In 2017, the year Project Iliad was launched by Amazon, cancellations of Prime membership subscriptions were reportedly reduced by 14%, saving the company millions in potential profit loss, according to the Insider report.

The FTC is seeking unspecified damages, including financial relief, to be paid out to consumer victims.

FTC hits Amazon for third time

Meantime, the complaint, filed in Washington State, is not the first run-in that Amazon has had with FTC regulators this year.

Earlier this month, the online retail giant was fined a total of $30 million for separate charges of multiple privacy violations involving Amazon's Ring and Alexa.

The first FTC case accused Ring employees of spying on female customers, as well as lax security practices that put Ring customers' private data at risk of exposure.

Amazon's Alexa was charged with violating US online child protection laws by illegally holding onto children's voice recordings captured by Alexa, even after families had requested they be deleted.

After the FTC settlements were announced, Amazon told Cybernews, "While we disagree with the FTC’s claims regarding both Alexa and Ring, and deny violating the law, these settlements put these matters behind us.”

Cybernews has reached out to Amazon for comment on the FTC's latest charges and is awaiting a response at the time of this report.

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