From The Wall Street Journal:
The Federal Trade Commission sued Amazon.com Wednesday, alleging the retail giant worked for years to enroll consumers without consent into Amazon Prime and made it difficult to cancel their subscriptions to the program.
The FTC’s complaint, filed in federal court in Seattle, alleged that Amazon has duped millions of consumers into enrolling in Amazon Prime, a $139 annual subscription service with more than 200 million members worldwide that has helped Amazon become an integral part of many American households’ shopping habits.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina Khan said.
The complaint, which is partially redacted, is the culmination of an investigation that began in March 2021. The FTC, a federal agency tasked with enforcing antitrust laws and consumer protection laws, seeks monetary civil penalties without providing a dollar amount.
An Amazon spokesman dismissed the FTC’s allegations as “false on the facts and the law.”
The complaint alleged that Amazon used “manipulative, coercive, or deceptive user interface designs known as dark patterns” to dupe users into automatically renewing Prime subscriptions.
“Amazon leadership slowed or rejected changes that would’ve made it easier for users to cancel Prime because those changes adversely affected Amazon’s bottom line,” the FTC added.
The FTC has been examining the use of dark patterns—a term for design tactics that prompt users into actions that benefit the company but not necessarily the user—in online commerce for several years.
The agency has been looking for cases in which companies entice consumers into subscriptions with misleading offers and then create obstacles for them to cancel payments. Vonage last year paid $100 million to settle FTC allegations that it imposed hurdles for customers to cancel the internet-based telephone service and charged unexpected termination fees.
For years, Amazon made it easy to enroll in Prime with one or two clicks, but created a “four-page, six-click, fifteen-option cancellation process” known internally as “the Iliad Flow,” the FTC said, in an apparent reference to Homer’s epic about the Trojan War. The agency said the “labyrinthine” procedure was designed to make it cumbersome and confusing for customers to cancel Prime.
Amazon revamped its Prime cancellation process for some subscribers in April, shortly before the FTC filed the case, according to the complaint. Amazon knew its policies were “legally indefensible,” the agency alleged.
“By design we make it clear and simple for customers to both sign up for or cancel their Prime membership,” he said. “We look forward to proving our case in court.”
Amazon said the FTC filed the lawsuit without allowing the company to explain to the agency’s three commissioners why it shouldn’t be sued, bypassing a step that is typically part of the process for companies facing an enforcement action.
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Amazon has said that it had it more than 200 million paid Prime members worldwide at the end of 2020.
. . . .
About 72% of all U.S. households, or 96 million, have a paid Prime membership, according to recent estimates from market research firm Insider Intelligence.
. . . .
The FTC is separately preparing a potential antitrust lawsuit against Amazon to be filed in the coming months that could challenge an array of the tech giant’s business practices as anticompetitive, The Wall Street Journal reported in February.
Link to the rest at The Wall Street Journal
PG acknowledges that there is likely a political element influencing the Federal Trade Commission”s decision. President Biden, a Democrat, nominated the Chairman of the FTC.
But Amazon management lives and works in a Democratic party stronghold.
The last time a non-Democrat held the office of Seattle mayor was in 1990 when it elected an Independent candidate. The last time Seattle elected a Republican mayor was 1969.
PG understands similar party affiliation patterns extend into most of the Seattle suburbs as well.
Thus, PG suspects that most Amazon employees in middle and upper management are Democrats.
Per PG’s search for Amazon-originated campaign information, Jeff Bezos has donated only to candidates who were Democrats.
Opensecrets.org shows the Democrat candidates received about 5X the Amazon-originated political donations that Republican candidates during the 2020 elections.
The last time PG checked, a Democrat was occupying the White House and President Biden chose the Chairman of the Federal Trade Commission, which agency has filed this antitrust suit.
Evidently, political contributions originating from Amazon were not enough to keep the Feds from suing the Zon for antitrust violations.