The Federal Trade Commission filed a lawsuit against Amazon for what it claimed was an ongoing campaign to sign up customers for its Prime program against their will and make it difficult for them to cancel their memberships.
The agency claimed in a case submitted to the U.S. District Court for the Western District of Washington that Amazon misled customers into signing up for the program by employing misleading graphics known as “dark patterns.”
It claimed that it was frequently more challenging to make purchases on Amazon without becoming a Prime member. It also claimed that customers were occasionally given a button to finish their transactions, which did not explicitly disclose that doing so would sign them up for Prime.
Amazon gave the procedure the internal name “Iliad” in honor of the lengthy siege of Troy during the Trojan War in an ancient Greek poetry.
According to the complaint, company executives delayed or rejected modifications that would have made canceling the subscription simpler. It said the behaviors were against the Restore Online Shoppers’ Confidence Act and the FTC Act.
More than 200 million people worldwide subscribe to Prime, which was founded in 2005. Members pay $139 per year, or $14.99 per month, in exchange for speedier shipping and additional benefits like free delivery, returns, and the Prime Video streaming service. A 17% increase over the same period last year, Amazon reported making $9.6 billion from subscriptions in the first three months of this year.
Although the FTC’s complaint is heavily redacted, it nevertheless contains “a number of allegations” that support its accusations against Amazon, according to a news release announcing the action. Additionally, the firm was charged with many instances of attempting to obstruct the agency’s investigation into Prime, which was launched in 2021.
Amazon deceived and locked consumers into recurring subscriptions without their permission, which not only annoyed users but also cost them a lot of money, according to a prepared statement by FTC Chair Lina Khan. These deceptive practices hurt both customers and law-abiding companies.
Additionally, as Amazon attempts to increase its e-commerce dominance and enter into new markets like groceries and healthcare, it is coming under increased regulatory scrutiny.
The group’s vice president and general counsel, Carl Szabo, said in a statement that the complaint is against Amazon for encouraging consumers to use Amazon Prime. “This is like going after Kroger for promoting its rewards program or Costco for its membership club,” he added. “It is without a doubt that the FTC is an out-of-control organization in need of tighter regulation. By reducing funds and looking into the FTC’s ethical transgressions and abuse of authority, Congress must exercise strict oversight to control it.
Furthermore, the business group cited Khan’s earlier criticism of Amazon and charged that she was using the case “to attack American businesses she does not like.”
Khan, 34, burst onto the antitrust scene in 2017 with her massive scholarly work as a Yale law student, “Amazon’s Antitrust Paradox.”
Amazon unsuccessfully requested in 2021 that she be removed from two separate antitrust investigations into its business, claiming that her prior public criticism of the company’s market dominance rendered her unable to act impartially.
Amazon and the United States have exchanged jabs on the investigation.
Amazon claimed that the FTC had harassed senior officials last year, including firm founder Jeff Bezos, in an effort to induce them to testify as part of the investigation.
The internet company has also been sued in other cases on the alleged overcomplicated nature of its Prime cancellation procedure. The business published a blog post in March with advice for customers on how to terminate their Prime memberships while it was being investigated by the FTC.
Amazon agreed to pay a $25 million civil penalty earlier this month to resolve claims that it violated a child privacy statute by retaining children’s speech and location data collected by its well-known Alexa voice assistant.
Additionally, the company consented to pay $5.8 million in refunds to customers for claimed privacy infringement concerning its Ring doorbell camera.
Source- News18
