The US Federal Trade Commission (FTC) has filed a lawsuit against Amazon, claiming that the e-commerce giant enrolled millions of consumers into its paid subscription service, Amazon Prime, without their knowledge or consent.
The FTC is an independent agency of the US government whose principal mission is to enforce civil antitrust law and promote consumer protection.
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According to the FTC, Amazon employed manipulative tactics and deceptive user-interface designs, known as “dark patterns,” to trick customers into automatically renewing their Prime subscriptions.
The agency seeks civil penalties and a permanent injunction to prevent future violations.
Lawsuit part of Biden Administration’s effort to rein in Big Tech
President Joe Biden’s administration has taken multiple actions to address the dominance of Big Tech companies and promote competition for the benefit of consumers.
The lawsuit against Amazon is one of these efforts. Amazon Prime, the largest subscription program worldwide, generates a staggering $25bn in annual revenue. Prime members, who pay $139 annually, play a significant role in driving Amazon’s sales volume.
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By GlobalDataThe subscription service is vital to Amazon’s other businesses, such as Prime Video and grocery delivery.
Amazon responds to lawsuit, claims customers love prime
Amazon has strongly denied the FTC’s allegations, asserting that the claims are false both in terms of facts and the law. The company stated that it ensures clarity and simplicity for customers to sign up for or cancel their Prime memberships.
Amazon expressed concerns about the timing of the lawsuit, as it was announced without prior notice during ongoing discussions with FTC staff. The company intends to engage in dialogue with the FTC commissioners to address the facts, context and legal issues involved.
