‘Tricked and Trapped:’ FTC and Amazon Go to Trial over ‘Deceptive’ Prime Subscription Practices

The FTC and Amazon are headed to trial over the government’s accusations that the tech giant deceives consumers into signing up for its Prime subscription service and makes it difficult for them to cancel their memberships.

CNBC reports that an FTC lawsuit filed in June 2023 against Amazon is now going to trial. The tech giant stands accused of employing deceptive tactics to lure tens of millions of customers into subscribing to its Prime program, which boasts over 200 million members worldwide and generates billions of dollars in revenue for the company. The trial, which commenced with jury selection on Monday and is expected to last approximately a month, is taking place in a federal court in Seattle, where Amazon is headquartered.

The crux of the FTC’s complaint revolves around allegations that Amazon misled consumers into joining Prime without their knowledge or consent. The agency pointed to instances where the company’s website featured a button instructing users to complete their transactions without clearly stating that they were simultaneously agreeing to a recurring Prime subscription. The FTC argues that this practice violates both competition and consumer protection laws by leaving consumers “tricked and trapped.”

Furthermore, the FTC contends that the process of canceling a Prime membership is equally confusing and convoluted. According to the agency, users must navigate through four webpages and choose from 15 options to terminate their subscription, a process that Amazon employees internally referred to as “Iliad,” alluding to Homer’s epic poem about the Trojan War.

In response to these allegations, Amazon maintains that the Prime sign-up and cancellation processes are “clear and simple,” and that the company has consistently been transparent about the terms of the program. While acknowledging that occasional customer frustrations and mistakes are inevitable, especially for a service as popular as Prime, Amazon argues that evidence of a small percentage of customers misunderstanding the enrollment or cancellation process does not constitute a violation of the law.

The trial has already seen an early victory for the FTC, with U.S. District Court Judge John Chun ruling that Amazon and two of its senior executives violated the Restore Online Shoppers’ Confidence Act by collecting Prime members’ billing information before disclosing the terms of the service. Judge Chun also determined that the two executives, Jamil Ghani, Amazon’s Prime boss, and Neil Lindsay, a senior vice president in the company’s health division, would be held individually liable if a jury finds in favor of the FTC.