FTC says Amazon tricks customers into subscribing to Prime
The world’s biggest online retailer is charged with using “dark patterns” to lure customers into buying Prime, then making it tough for subscribers to cancel.
In a complaint filed in federal court on Wednesday, the FTC alleged Amazon designed its website and apps to lure customers into purchasing a Prime membership that automatically renews on a regular basis.
A design that tricks customers into doing something they probably would not otherwise do is known as a “dark pattern,” and the FTC claims Amazon’s website is full of them that are meant to drive subscriptions to Prime.
‘Manipulative tactics harm consumers and law-abiding businesses alike’
Lina M. Khan, the chairperson of the FTC, said in a statement:
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money.”
Among other things, the FTC says Amazon shoppers who don’t already have a Prime membership are given multiple opportunities to sign up when they try to buy something on the website.
In some cases, it can be difficult for shoppers to find a way to opt out of purchasing a Prime membership when they buy things from the store, the FTC said.
To make matters worse, the FTC said Amazon’s website was carefully orchestrated to make it difficult for customers to cancel their recurring Prime membership once it started.
As of June, the cost of a Prime membership in the United States is $15 a month or $140 a year.
“These manipulative tactics harm consumers and law-abiding businesses alike,” continued Khan, who wrote a white paper in 2017 on Amazon’s apparent antitrust “paradox.”
Prime is Amazon’s cash cow
Prime brings in a lot of cash for Amazon. Every year, the service generates around $25 billion in revenue from its 200 million worldwide subscribers, according to Reuters, which cited data from the FTC.
The membership offers a number of benefits for consumers, including two-day shipping on most goods sold through the Amazon marketplace and access to various digital services like Prime Video and Amazon Music.
Heather Layman, a spokesperson for Amazon, said the FTC could not be more wrong about how the company markets Prime memberships:
“The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership. As with all our products and services, we continually listen to customer feedback and look forward to the facts becoming clear as this case plays out.”
The FTC lawsuit comes the same week that Amazon announced its upcoming Prime Day event, which offers deep discounts on goods and services purchased through the retailer. The two-day event is scheduled to start July 11.
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