Thu. Feb 22nd, 2024

From today’s Los Angeles Times:

The Federal Trade Commission sued on Wednesday, alleging the e-commerce giant duped consumers into signing up for its Prime membership service and deliberately made it hard to cancel.

The FTC filed a lawsuit in federal court in Washington state claiming that Amazon’s website manipulates users into enrolling in Prime, for which subscribers pay $139 a year for privileges such as speedy free delivery, video streaming and access to 100 million songs. The cancellation process for Prime is also difficult to find and requires multiple steps, the FTC alleged. The agency said Amazon referred to the process internally as the “Iliad,” after Homer’s lengthy epic poem.

The agency has recently targeted subscription cancellations, proposing a rule in March that would require companies to make it as easy to cancel as it is to sign up.

In its complaint, the FTC said consumers must click through five pages on the desktop web store or six on the mobile app to cancel Prime. It also claimed Amazon failed to turn over information sought by investigators, taking more than 18 months to produce materials the FTC sought.

The FTC said Amazon’s tactics violate a 2010 consumer protection law designed to protect online shoppers. The agency previously used the law to ding MoviePass and its former parent company, Helios and Matheson Analytics; Intuit’s Credit Karma; and Ericsson’s internet phone service Vonage over subscription auto-renewal and cancellation practices. Vonage paid $100 million to settle the FTC’s suit and Credit Karma $3 million to reimburse consumers.

“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 in a statement.

Amazon didn’t immediately respond to a request for comment.

Read the complete story here.

By Editor