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FTC Alleges Amazon “Tricked and Trapped” Customers into Prime Subscriptions

FTC Alleges Amazon “Tricked and Trapped” Customers into Prime Subscriptions

The Federal Trade Commission filed a suit against Amazon, alleging the online retailer “tricked and trapped” consumers into enrolling in Amazon Prime without their consent and used so-called dark patterns to make it difficult for them to cancel subscriptions.

The lawsuit claims Amazon “sabotaged” consumers’ attempts to cancel Prime subscriptions and tricked them into automatically renewing the service. According to the FTC, Amazon executives made a conscious choice to create these problems and ignored potential fixes that would help consumers.

“These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets,” said FTC Chair Lina M. Khan.

Throughout the checkout process, customers are presented with numerous options to sign up for a recurring Prime subscription. According to the FTC, Amazon even used a purchase button that immediately initiated a subscription without properly informing customers.

The FTC had been investigating sign-up and cancellation processes for Amazon’s Prime program since March 2021.

The FTC negotiated a $5.8 million settlement with Amazon last month on charges that Ring workers spied on customers using their devices. The Wall Street Journal reported in February that the commission was planning an antitrust suit against the e-commerce behemoth.

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About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.