The US Federal Trade Commission (FTC) claims that Amazon is doing its dark practice of forcing customers to enroll in a Prime subscription. Because of this, the agency has filed a lawsuit against the Seattle firm after seeing that some customers are having a hard time canceling their memberships.
Amazon is Engaging in Doing 'Dark Patterns
According to the complaint filed in the US District Court for the Western District of Washington, Amazon utilized what the FTC refers to as "dark patterns" - manipulative, coercive, or deceptive user-interface designs - to enroll consumers in automatically renewing Prime subscriptions.
According to CNBC, the complaint alleges that the e-commerce giant deliberately created a convoluted cancellation process, making it harder for users to cancel their subscriptions compared to signing up for Prime. The complex cancellation process is believed to have been designed to distract or discourage consumers from following through on their cancellation intentions.
FTC Sees Amazon's Method as a 'Harmful' Practice
This lawsuit represents a significant step taken by the FTC against business practices it deems harmful to consumers, employing psychological gimmicks to either entice them or prevent them from easily terminating subscriptions.
The investigation into Amazon's Prime practices involved testimonies from company founder Jeff Bezos and CEO Andy Jassy, signifying the gravity of the issue at hand.
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Amazon Could Lose a Lot of Profit Because of Prime Lawsuit
Amazon Prime is a critical aspect of Amazon's business model, boasting over 200 million paid subscribers in 2021. The company's investments in original content and expedited shipping have contributed to the popularity of Prime. Through subscriptions, Amazon generates substantial revenue and encourages customers to spend more time and money on its platforms, per CNN.
What is Amazon's 'Iliad Flow?'
The FTC accuses Amazon in maintaining a complex cancellation process, internally referred to as "Iliad Flow" since 2016. This process required customers to navigate a lengthy and intricate four-page, six-click, fifteen-option cancellation process.
The FTC claims that Amazon strategically included multiple off-ramps during this process, such as warnings about missing out on benefits, promotional discounts, and enticing deals, in an attempt to deter customers from canceling their subscriptions.
While canceling a Prime subscription involved a convoluted process, the FTC argues that signing up for Prime was incredibly simple, requiring just two clicks. Furthermore, the FTC alleges that Amazon often obscured details about recurring bills in the fine print.
Back in May, Amazon agreed to pay over $30 million to settle two FTC privacy complaints related to its Alexa and Ring products.
In March, the company was also the subject of FTC's allegation centered on luring Amazon customers. According to the report by Tech Times, the firm was pulling off a shady tactic to promote its Prime program.
