The Federal Trade Commission has sued Amazon, accusing the retailer of enrolling customers in its Amazon Prime program without their consent and “sabotaging their attempts to cancel” those memberships.
“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 in a statement. “These manipulative tactics harm consumers and law-abiding businesses alike.”
The FTC said Amazon used “manipulative, coercive, or deceptive user-interface designs” to trick customers into enrolling in auto-renewing subscriptions. Then, the FTC charged, the company knowingly complicated the cancellation process, with management slowing or rejecting changes that would have made it easier for subscribers to cancel.
Amazon, the FTC noted in the suit, “revamped its Prime cancellation process for at least some subscribers shortly before the filing of this complaint.”
Amazon denied the charges vehemently.
“The FTC’s claims are false on the facts and the law,” the company said in a statement to Coins2Day. “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 for ways to improve the customer experience, and we look forward to the facts becoming clear as this case plays out.”
Those comments were in line with a statement from last year, when it criticized the FTC probe of Prime, saying the “investigation has been unusual and perplexing.”
The company also accused the FTC of springing the suit on it while discussions were still ongoing.
“We also find it concerning that the FTC announced this lawsuit without notice to us, in the midst of our discussions with FTC staff members to ensure they understand the facts, context, and legal issues, and before we were able to have a dialogue with the commissioners themselves before they filed a lawsuit,” a spokesperson said. “While the absence of that normal course engagement is extremely disappointing, we look forward to proving our case in court.”
The court filing is heavily redacted, which the FTC indicated it is fighting. The commission also alleges in the complaint that Amazon attempted to “delay and hinder” the investigation in multiple instances.
FTC Chair Lina Khan is a proponent and even the originator of the “hipster antitrust” theory, which contends that major firms, especially Amazon, have too much power over markets.
Amazon shares were down more than 1% following the suit. This is far from the company’s first clash with the FTC. Just last month, it agreed to pay $30 million to settle privacy violations involving its voice assistant Alexa and its Ring doorbell camera.
The suit was announced on the same day Amazon was riding a wave of consumer goodwill as it unveiled the dates for its 2023 Prime Day.