The US has lodged allegations against Amazon, accusing the company of misleading customers into subscribing to Prime with automatic renewals and creating obstacles when attempting to cancel.
The Federal Trade Commission (FTC), the consumer rights watchdog in the US, filed a lawsuit making these claims against Amazon.
The FTC cited Amazon’s allegedly “manipulative” website designs as evidence. In response, Amazon has refuted the charges, labeling them as “false on the facts and the law.”
Prime boasts a global subscriber base of over 200 million individuals. This service provides various benefits such as shipping perks, access to streaming movies, and more. In the US, Prime membership costs $139 annually or $14.99 per month, while in the UK, it is priced at £95 per year.
According to the FTC, Amazon employed website designs that coerced customers into inadvertently enrolling in Prime and automatically renewing their subscriptions while making purchases.
In the filed complaint in federal court in Seattle, the agency alleged that Amazon intentionally made it challenging for users to opt out of auto-enrollment in order to protect its financial interests.
The changes necessary to improve the opt-out process were believed to have a negative impact on Amazon’s bottom line, as per the FTC’s allegations.
Furthermore, the FTC claimed that Amazon subjected customers attempting to cancel to a burdensome process referred to internally as “Iliad,” named after the Greek epic depicting the lengthy and challenging Trojan War.
This process involved navigating through a four-page, six-click, and fifteen-option sequence, adding to the difficulties faced by customers seeking cancellation.
Despite making changes to the cancellation process shortly before the lawsuit was filed, the FTC asserted that Amazon’s tactics violated laws intended to safeguard shoppers.
FTC Chair Lina Khan stated, “Amazon deceived individuals by ensnaring them in recurring subscriptions without their consent, causing frustration to users and resulting in significant financial losses.”
The FTC is seeking a court order to enforce changes in Amazon’s practices and also requesting undisclosed financial penalties.
Amazon stated that it was engaged in ongoing discussions with the agency regarding the issues when the lawsuit was unexpectedly filed without prior notice.
In response, the company asserts, “In truth, customers have a positive experience with Prime, and we have deliberately ensured that the process of subscribing to or canceling Prime membership is transparent and easy to follow.”
The FTC has consistently cautioned online companies against employing “dark patterns” to manipulate shoppers. Since 2021, the agency has been conducting an investigation into Amazon’s Prime program.
The FTC revealed that Amazon had made several attempts to impede the investigation, including delays in providing requested documents in a timely manner.
Evelyn Mitchell-Wolf, a senior analyst at Insider Intelligence, remarked that the FTC’s actions were aimed at setting an example with Amazon. She highlighted that it is not uncommon for companies to create obstacles when canceling an account compared to the ease of creating one.
Source : bbc.com