Former FTC Chief Technologist Neil Chilson voiced his surprise at the Federal Trade Commission's (FTC) allegations of deceptive practices against Amazon due to its Prime service, according to a CNBC video published on June 21.
"The FTC case here, while big in numbers, is somewhat on very strange and somewhat shaky legal ground, I think," said Chilson.
According to an FTC press release published on June 21, the FTC is taking action against Amazon due to its multi-year effort to enroll consumers into its Prime service without their consent, while also making it difficult for them to cancel their subscriptions. The complaint alleges that Amazon's use of "dark patterns" violated the FTC Act and the Restore Online Shoppers' Confidence Act.
“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. The FTC will continue to vigorously protect Americans from “dark patterns” and other unfair or deceptive practices in digital markets.”
In its official complaint, the FTC presented several allegations against Amazon, including its failure to prevent unauthorized Prime enrollments and obstacles that consumers encountered when attempting to cancel. Amazon allegedly deliberately implemented a complicated cancellation process to discourage Prime members from canceling their subscriptions, concerned about the potential negative profit impacts. During the online checkout process, Amazon allegedly promoted multiple opportunities for consumers to subscribe to Amazon Prime, intentionally making it challenging for them to opt out of Prime while making purchases. The transaction completion button also repeatedly failed to indicate that consumers that the purchase would result in joining Prime through a recurring subscription. Additionally, the FTC's complaint focuses on Amazon's implementation of a cancellation process designed to discourage unsubscribing. Consumers had to sort through multiple pages offering discounts, continuation options or the ability to disable auto-renew before finally being allowed to cancel the service.
In its September 2022 staff report, the FTC said that practices similar to Amazon's had become more popular across multiple companies. Tactics included disguising ads as independent content, hindering cancellation processes, hiding key terms, imposing hidden fees and tricking consumers into sharing their data.
