FTC names three Amazon executives in lawsuit over shady Prime subscription practices


In brief: The FTC has named three Amazon executives in its case against the company. The agency alleges that the tech giant pushed, or tricked, people into signing up for the Prime service and made unsubscribing a task so arduous that many give up trying.

In June, the FTC sued Amazon for allegedly violating the FTC Act and the Restore Online Shoppers’ Confidence Act. The Commission said in its complaint that Amazon knowingly tricked people into signing up for Prime through the use of “Dark Patterns” – designing the app and web pages in a way that can make people sign up without really knowing it – and deliberately made canceling the payments far too hard.

The Reg reports that three Amazon execs have been named in the complaint: Neil Lindsay, former head of the Prime team and now a member of Amazon’s management team advising on corporate strategy; current boss Russell Grandinetti; and Prime VP Jamil Ghani.

It’s alleged that Amazon customer services representatives were told to purposely make canceling Prime subscriptions a lengthy process even though it could be done quickly. It’s also claimed that the named execs knowingly made the process more complicated to retain customers, and even enrolled people who were not active Amazon buyers.

“Prime subscription fees account for $25 billion of Amazon’s annual revenue. Approximately 70 percent of Amazon’s revenue comes from American consumers. […] Consequently, one of Amazon’s primary business goals – and the primary business goal of Prime – is increasing subscriber numbers,” the lawsuit states.

In 2022, internal Amazon documents obtained by Insider showed the company had, since 2017, been concerned that its user interface designs led customers into feeling manipulated into signing up for Prime. The documents also showed that Amazon intentionally made the process of canceling Prime so long that it became known as the Iliad, a reference to Homer’s 15,693-line poem.

Amazon spokesperson Heather Layman said in a statement that the FTC’s claims are “false on the facts and the law.”

“The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership,” Layman added.

Earlier this year, the FTC proposed a ‘Click to Cancel’ provision that would require companies to make the process of canceling recurring subscriptions as simple as signing up for them. Trade groups representing publishers, advertisers, and video game companies say a simpler cancelation process would confuse consumers and create problems for businesses.


Source link –

Leave a Comment