Last week, the Federal Trade Commission announced that it reached a deal with Amazon to resolve a dispute over the retailer’s allegedly unfair practices. The dispute started two years ago when the FTC filed a complaint in federal court, arguing that Amazon tricked consumers into enrolling in Amazon Prime. For example, the checkout process often made it hard to figure out how to buy a product without subscribing to Prime. These “dark patterns” induced consumers to sign up for a subscription without their consent, violating the FTC Act and the Restore Online Shoppers’ Confidence Act. Prime subscriptions renew automatically by default, making these tactics even more profitable for Amazon and damaging to consumers.
The FTC also claimed that Amazon intentionally tried to make it difficult for people to cancel Prime subscriptions. It made the start of this process hard to find. Shoppers who succeeded in finding it then needed to click through several pages in a process that Amazon itself called the “Iliad.” (This refers to the epic poem about the similarly epic Trojan War.) These pages barraged consumers with attempts to change their mind, or offers to stay subscribed for a discount or without automatic renewal.
Amazon now has agreed to a final proposed order wrapping up the litigation. If approved by the judge, it would require the retailer to pay a total of $2.5 billion. This includes a $1 billion civil penalty, a record amount for a case based on an FTC rule violation. The remaining amount will go toward compensating 35 million consumers who allegedly suffered harm from the unlawful practices. This is the second-highest amount of restitution that the FTC has secured.
The proposed order also requires substantive changes to how Amazon invites users to join Prime and allows them to cancel their subscriptions. For example, Amazon will need to integrate an easily visible button for declining Prime. It must provide clear descriptions of what the subscription involves, including how much it costs, whether it renews automatically, and how a consumer can cancel. Meanwhile, Amazon must replace the notorious “Iliad” with an easier, less time-consuming way to cancel a subscription.
The publicity surrounding the FTC action may help alert consumers to the types of manipulative methods that online retailers sometimes use, as well as the laws that curb these tactics. States also have their own consumer protection laws, enforced by their agencies. Consumers should understand their rights under these laws as well and file complaints if they suspect violations.
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