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The FTC’s Latest Amazon Complaint, Explained
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The FTC’s Latest Amazon Complaint, Explained

The feds say the e-commerce company bilked customers into paying for Amazon Prime.

An Amazon delivery truck on June 21, 2023, in Richmond, California. (Photo by Justin Sullivan/Getty Images)

The Federal Trade Commission (FTC) sued Amazon in federal court last week, accusing the e-commerce giant of unfairly funneling unsuspecting consumers to join its Prime membership service and making it onerous to cancel their subscriptions. 

It’s the latest in a series of complaints the agency has lodged against the company.

What ‘manipulative tactics’ does the FTC allege?

The FTC’s 87-page complaint argues Amazon intentionally designed its website’s checkout page to push customers into subscribing for Prime when making a purchase, often without their awareness. The complaint also says that the company engineered a maze-like experience for consumers trying to cancel their Prime subscription.

The FTC labels the “manipulative tactics” employed by Amazon as “dark patterns.” These include using fonts, repetition, and color to present “misdirection,” “asymmetric choices,” and  “confirmshaming,” (defined as “a design element that uses emotive wording around the disfavored option to guilt users into selecting the favored option”).

Amazon internally named the subscription cancellation process “Iliad Flow” referring to Homer’s lengthy and sprawling epic of the Trojan War, which signals Amazon’s intention to have an opaque cancellation process, the FTC says. Canceling a Prime membership would require the consumer to go through at least six clicks.

“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. Amazon charges its Prime members $14.99 per month, or $139 per year.

Regulators maintain Amazon’s website design violates the Federal Trade Commission Act and the Restore Online Shoppers’ Confidence Act, which prohibit unfair practices in commerce and mandate that consumers provide their explicit informed consent for online purchases, respectively.

Amazon hasn’t filed a response in court yet but denied the allegations in a statement.

“The FTC has the statutory authority to decide what’s unfair and what’s not,” Ron Knox, senior researcher at the Institute for Local Self-Reliance, an organization that challenges corporate dominance, tells The Dispatch. “The FTC looked at the system that Amazon set up, to both attract and keep its Prime subscribers, and decided that was unfair.”

But what consumers deem unfair may be up for debate.

​​“Six clicks does not seem like a lot to the average consumer and there’s really a question of where is the consumer harm in this case,” Jennifer Huddleston, research fellow at the Cato Institute, tells The Dispatch. “This is something where you have a very clear process on how to cancel, particularly compared to other subscription services consumers may have encounters on or offline, like trying to cancel a gym membership.” 

What about past accusations against Amazon?

The dispute may feel like déjà vu. The FTC and Amazon settled two separate, unrelated cases in May: Amazon agreed to pay $25 million regarding claims that its Alexa AI devices illegally collected children’s data, and $5.8 million over privacy concerns for its Ring doorbell product. 

While those two cases predated Khan’s tenure at the FTC, she’s previously signaled a desire to target Amazon for its business practices. She rose to prominence as a law student in 2017 when she advocated for greater government action to curb the “potential harms to competition posed by Amazon’s dominance” in a Yale Law Journal article. “Elements of the firm’s structure and conduct pose anticompetitive concerns, yet it has escaped antitrust scrutiny.”

That history and Khan’s other public statements about Amazon prompted a request for Khan to recuse herself from Amazon-related investigations, lawsuits, and legal processes in 2021. That request was denied.

“I think it’s concerning that we continue to see the FTC—particularly under Chair Khan’s leadership—targeting tech companies,” says Huddleston. “This is yet the latest example of really seeing the FTC attempt to go after these big tech companies, at a time when we’re seeing millions of consumers really find that they’re benefiting from the services offered by these companies.”

Peter Gattuso is a reporter for The Morning Dispatch, based in Washington, D.C. Prior to joining the company in 2024, he interned at The Dispatch, National Review, the Cato Institute, and the Competitive Enterprise Institute. When Peter is not helping write TMD, he is probably watching baseball, listening to music on vinyl records, or discussing the Jones Act.