In a complaint filed on Wednesday, the U.S. Federal Trade Commission is alleging that Amazon has enrolled millions of consumers into its Prime service without their consent—and what’s more—has made it difficult to cancel the service.
“For years, Defendant Amazon, Inc. has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service. Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions,” the complaint noted.
According to the FTC, for years, Amazon has knowingly made the cancellation process complicated for Prime subscribers who were looking to end their membership. And after pressure from the FTC—who made the practices known—the e-commerce giant reworked the cancellation process for some subscribers not too long before the FTC filed the recent complaint.
“However, prior to that time, the primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather thwart them. Fittingly, Amazon named the process ‘Iliad,’ which refers to Homer’s epic about the long arduous Trojan War. Amazon designed the Iliad cancellation process to be labyrinthine … and it’s leadership slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes adversely affected Amazon’s bottom line,” the complaint stated.
Prime Drives Amazon’s E-Commerce Efforts
Amazon Prime, which costs consumers either $139 annually or $14.99 monthly, makes up a significant portion of Amazon’s overall revenue. In fact, Prime subscription fees account for $25 billion of the e-commerce giant’s annual revenue.
Because of the many benefits of Prime—including free shipping—consumers are likely to spend more on Amazon compared to non-Prime subscribers. Because the main goal of Prime is to increase its subscriber base, Amazon has been working to convert non-Prime subscribers to Prime subscribers. Some of these upsell opportunities include various marketing efforts on the company’s site, such as big orange buttons that encourage consumers to subscribe to Prime or get a trial for Prime Video, with a “comparatively inconspicuous link to decline.”
And for consumers that have been trying to cancel Prime, the Iliad Flow requires them to navigate a “four-page, six-click, fifteen-option cancellation process.” Compared to Amazon’s one or two-click enrollment in Prime, the hoops consumers have to jump through to cancel the service are strenuous.
The FTC also notes that Amazon is violating the Restore Online Shopper’s Confidence Act (ROSCA), which Congress passed in 2010, which states that “consumer confidence is essential to the growth of online commerce. To continue its development as a marketplace, the Internet must provide consumers with clear, accurate information and give sellers an opportunity to fairly compete with one another for consumers’ business.”
