Judge Denies Amazon’s Bid to Dismiss FTC Lawsuit Alleging Retailer Tricked Users Into Signing up to Prime

Amazon.com Inc. has failed in its attempt to have a lawsuit filed against it by the Federal Trade Commission (FTC) dismissed. The lawsuit relates to allegations that Amazon tricked customers into signing up for Prime memberships and then made it extremely complicated for them to unsubscribe. The case will now go ahead. A federal judge said that “a reasonable consumer seeking to complete a purchase on Amazon’s marketplace could miss the small print at the bottom of the page.” The FTC claims that some Amazon employees pressed company executives over the automatic enrollment issue, but that the leadership procrastinated. The agency also alleges that Amazon knew that some customers were charged for multiple months before they canceled their Prime memberships. Furthermore, efforts to increase clarity were rolled back when they impacted on the number of Prime subscribers. Amazon has denied all of the allegations.

The complaint centers on Prime’s “iliad flow” cancellation process, which the suit claims is a four-page, six-click, fifteen-option process. While Amazon did implement changes to improve clarity, these were later rolled back. The FTC had apparently put “substantial pressure” on Amazon to improve the process in the lead up to the filing of the complaint. The lawsuit claims that Amazon still requires five clicks on desktop and six on mobile for consumers to cancel from Amazon.com; the FTC is seeking civil penalties and a permanent injunction against the company. Amazon has claimed that customers enjoy Prime and that the subscription service is easy to sign up for and cancel. Legal proceedings will start in February 2025. Amazon is also contending with a separate lawsuit from investor D.M. Cohen Inc. on the same issue
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