Podcast - The FTC Takes Action Against the Amazon Prime Program

Good day and welcome to another podcast with Clearly Conspicuous. As we've noted in previous sessions our goal is to make you succeed in this very aggressive and progressive environment, make you aware of developments that's going on with the government and give you practical tips for success. It's a privilege to be with you today.

The FTC's Allegations Against Amazon Regarding Unfair and Deceptive Business Practice

Today we discuss an action by the Federal Trade Commission against Amazon for its efforts to enroll consumers in its Prime program without consumers' consent, while allegedly making it difficult for consumers to cancel their subscriptions to Prime. In a federal court complaint, the FTC charges that Amazon has knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime. Specifically, the agency alleges that Amazon used manipulative, coercive or deceptive user interface design, known as dark patterns, to trick consumers into enrolling in automatically renewing Prime subscriptions. The FTC also alleges that Amazon also knowingly complicated the cancellation process for Prime subscribers who sought to end their membership. The FTC claims that Amazon leadership slowed or rejected changes that would have made it easier for users to cancel Prime because those changes adversely affected Amazon's bottom line. FTC Chair Lina Khan said, "Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users, but also costing them significant money. These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from dark patterns and other unfair, deceptive practices in the digital markets." For now, the FTC complaint is significantly redacted, though the FTC has told the court it is not feeling the need for ongoing secrecy compelling. Nevertheless, the complaint contains a number of allegations related to the company's decision not to make changes to prevent nonconsensual enrollment online and the difficulties consumer faced in attempting to unsubscribe from the service. The FTC charges that Amazon put in place a canceling process designed to deter consumers from successfully unsubscribing from Prime. Previous reporting about the process and the media has noted that Amazon used the term Iliad to describe the process, which the reporting cites as an allusion to Homer's epic poem set over 24 books and nearly 16,000 lines about the decade-long Trojan War. The complaint alleges that Amazon was aware of consumers being nonconsensually enrolled and the complex and confusing process to cancel Prime, that the company's executives failed to take any meaningful steps to address the issue until they were aware of the FTC investigation. In the complaint, the FTC also alleges that Amazon attempted to delay and end the commission's investigation in multiple instances.

Concluding Thoughts

So here's the key takeaway. The commission is clearly not shy about filing lawsuits against major companies when deceptive or unfair business practices result in consumer harm. The commission's focus on data patterns is apparent with respect to dark patterns. It's important to note that last year the FTC issued a report on these practices that can trick or manipulate consumers into buying products or services or giving up their privacy. The dark pattern tactics detailed in the report include disguising ads to look like independent contacts, making it difficult for consumers to cancel subscriptions or charges bearing key terms or junk fees, and tricking consumers into sharing their data. The report highlighted the FTC's efforts to combat the use of dark patterns in the marketplace and reiterated the agency's commitment to taking action against tactics designed to trick and trap consumers. So please stay tuned for further programs as we identify and address the key issues and developments and provide strategies for success. I wish you continued success and a meaningful day. Thank you.