FTC Sues Amazon Over Prime Subscriptions

Improve the News Foundation -

Facts

  • The Federal Trade Commission (FTC) sued Amazon in a US District Court in Washington Wednesday for allegedly using deceptive tactics to get millions of users to sign up for its Prime program and "sabotaging" attempts to cancel the subscriptions.1
  • The FTC claims Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act by using so-called "dark patterns" that intentionally manipulated users into enrolling in and automatically renewing Prime subscriptions with "coercive or deceptive user-interface designs."2
  • The commission says that Amazon described its practices, which began in 2016, using the term "Iliad Flow," comparing the complicated process of canceling a Prime subscription to Homer’s epic about the Trojan War.3
  • In a statement, FTC Chair Lina Khan alleged "Amazon tricked and trapped people into recurring subscriptions without their consent" to protect its bottom line, noting that the $139 yearly Prime subscription generates $25B in annual revenue for the tech giant.4
  • The FTC's investigation has been ongoing since 2021, with the dispute escalating when the agency asked CEO Andy Jassy and founder Jeff Bezos to testify on the company's Prime practices, to which Amazon appealed and the FTC rejected.5
  • After paying $30M last month to settle two FTC privacy complaints, Wednesday’s filing marked Amazon’s first major lawsuit brought by Khan. Meanwhile, Amazon says the allegations are "false on the facts and the law," claiming it didn't receive advance notice of the suit.6

Sources: 1CNBC, 2FOX News, 3Reuters, 4NPR Online News, 5NBC, and 6CNN.

Narratives

  • Narrative A, as provided by Guardian. Amazon has been using deceptive and illegal tactics to dupe millions of subscribers into unknowingly enrolling in Amazon Prime while creating a self-described “Iliad” process to prevent users from leaving the program. This predatory behavior has cost consumers millions of dollars and has been intentionally preserved to keep cash flows up for the tech behemoth. Amazon must stop these manipulative tactics and pay for its transgressions.
  • Narrative B, as provided by Fortune. Since 2021, FTC Chair Lina Khan has unfairly targeted Amazon and its executives in an egregiously handled probe that shows a clear personal vendetta she has against CEO Andrew Jassy and Jeff Bezos. Khan has publicly shown her bias against Amazon since her 2017 article berating the company, and she is now abusing her power to target Amazon and its key figures.